Bingshan Refrigeration & Heat Transfer
Technologies Co., Ltd.
2020 Annual Report
April, 2021
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Section 1 Important Notice, Table of Contents, and Definitions
The directors and the Board of Directors, the supervisors and the
Supervisory Board, and Senior staff members of Bingshan Refrigeration &
Heat Transfer Technologies Co., Ltd. (hereinafter referred to as the
Company) hereby confirm that there are not any important omissions,
fictitious statements or serious misleading carried in this report, and shall
take all responsibilities, individual and/or joint, for the reality, accuracy and
completeness of the whole contents.
Chairman of the Board of Directors of the Company Mr. Ji Zhijian,
Financial Majordomo Mr. Ma Yun and the head of Accounting Department
Mrs. Wang Jinxiu hereby confirm that the financial report of the annual
report is true and complete.
All the directors have attended this Board meeting of the Company.
There is no significant risk having adverse influence on attainment of the
Company's future development strategy and business targets. The
paragraph "Discussion and Analysis of the Business situation" in Section 4
of this Annual Report describes major risks the Company may be confronted
with, including the risk of Increasing market competition risk, the market
promotion for new product and new technology slow and the Accounts
receivable is on the high side. See the related sections for the
countermeasures to be taken by the Company.
The profit distribution proposal reviewed and adopted at this Board meeting
of the Company is: Based on the total capital stock of 843,212,507 shares, the
dividend of RMB 0.1 in cash (including tax) will be distributed for every 10
shares; The Company will not transfer the capital reserve to increase capital
stock.
This report is written respectively in Chinese and in English. In the event of
any discrepancy between the two above-mentioned versions, the Chinese
version shall prevail.
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CONTENTS
Section 1 Important Notice, Table of Contents, and Definitions ................................................................................2
Section 2 About the Company ....................................................................................................................................5
Section 3 Summary of Main Accounting Data and Financial Indicators....................................................................8
Section 4 Board of Directors' Report..........................................................................................................................9
Section 5 Important Issues........................................................................................................................................20
Section 6 Change in Share Capital and Shareholders' Information ..........................................................................25
Section 7 Information on Preferred Stock ................................................................................................................29
Section 8 Information on the Convertible corporate bonds………………………………………………………...30
Section 9 Information on the Company’s Directors, Supervisors, Senior Management and Staff ………………...31
Section 10 Corporate Governance ............................................................................................................................36
Section 11 Information on Corporate Bonds ............................................................................................................39
Section 12 Financial Report .....................................................................................................................................40
Section 13 Contents of Reference Documents .......................................................................................................141
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Definitions
Defined item Stands for Meaning
Reporting period Stands for From Jan. 1, 2020 to Dec. 31 2020
The Company, this Company Stands for Bingshan Refrigeration & Heat Transfer Technologies Co.,Ltd.
Wuhan New World Refrigeration Industry Co., Ltd., one of the subsidiaries of the Company
Wuxin Refrigeration Stands for
where the Company holds 100% of its shares.
Dalian Bingshan Group Engineering Co., Ltd.,one of the subsidiaries of the Company where
Bingshan Engineering Company Stands for
the Company holds 100% of its shares.
Bingshan Technology Service (Dalian) Co., Ltd. one of the subsidiaries of the Company
Bingshan Service Company Stands for
where the Company holds 100% of its shares.
Panasonic Appliances Compressor (Dalian) Co., Ltd. one of the associated companies of the
Panasonic Compressor Stands for
Company, where the Company holds 40% of its shares.
Panasonic Appliances Cold-Chain (Dalian) Co., Ltd. one of the associated companies of the
Panasonic Cold-Chain Stands for
Company, where the Company holds 40% of its shares.
Panasonic Appliances Refrigerating System (Dalian) Co., Ltd., one of the
Panasonic Refrigerating System Stands for
associated company of the Company, where the Company holds 20% of its shares
Dalian Fuji-Bingshan Vending Machine Co., Ltd., one of the associated companies of the
Fuji-Bingshan Stands for
Company, where the Company holds 49% of its shares.
Jiangsu JingXue Insulation Technology Co.,Ltd., one of the associated companies of the
JingXue Co.,Ltd. Stands for
Company, where the Company holds 29.212% of its shares.
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Section 2 About the Company
I. Company information
Short form of the stock Bingshan; Bingshan B
Stock code 000530; 200530
Listed stock exchange Shenzhen Stock Exchange
Legal name in Chinese 冰山冷热科技股份有限公司
Legal name abbreviation in Chinese 冰山冷热
Legal English name Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Legal English name abbreviation Bingshan
Legal representative Ji Zhijian
Registered address No.106, Liaohe East Road, Dalian Economic and Technological Development Zone
Post code of Registered address 116630
Office address No.106, Liaohe East Road, Dalian Economic and Technological Development Zone
Post code of Office address 116630
Internet web site of the Company www.bingshan.cn
E-mail of the Company 000530@bingshan.com
II. Contact persons and information
Secretary of the Board of Directors Authorized representative for securities affairs
Name Song Wenbao Du Yu
Bingshan Securities﹠Legal Affairs No.106, Liaohe Bingshan Securities﹠Legal AffairsNo.106, Liaohe
Address East Road, Dalian Economic and Technological East Road, Dalian Economic and Technological
Development Zone Development Zone
Tel. 0411-87968130 0411-87968822
Fax 0411-87968125 0411-87968125
E-mail 000530@bingshan.com 000530@bingshan.com
III. Information disclosure and place of preparation for inquiry
Name of the newspaper designated by the Company for China Securities Daily and Hong Kong Commercial
information disclosure Daily
Address of the website designated by China Securities
http://www.cninfo.com.cn
Regulatory Commission for publishing this Annual Report
Place where this Annual Report was prepared for inquiry Securities﹠Legal Affairs Department of the Company
IV. Alteration to the registration
Organization code 912102002423613009
Change in main business since the Company was listed No change
Changes in the holding shareholder No change
V. Other related information
Accounting firm engaged by the Company
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Name of accounting firm ShineWing CPAs (Special General Partnership)
Office location of accounting firm 9/F,A Building No.,8 north street of Chao Yang Men, Dong Cheng District Beijing, China
Name of signing certified public accountant Sui Guojun, Wang Dong
Sponsor the Company appointed for performance of the consistent supervision duty in the reporting period
□ Applicable √ Not applicable
Financial consultant the Company appointed for performance of the consistent supervision duty in the reporting
period
□ Applicable √ Not applicable
VI. Main accounting data and financial indicators
Did the Company retroactively adjust or restate the accounting data of previous years due to change in the
accounting policy and correction of accounting mistakes?
□ Applicable √ Not applicable
Increase/decrease compared
2020 2019 2018
with previous year
Operating revenue 1,727,267,935.15 1,831,851,280.70 -5.71% 1,966,064,612.44
Net profit attributable to shareholders of listed companies 21,341,133.39 89,112,113.43 -76.05% 110,503,175.90
Net profit belonging to the shareholders of listed
companies after the deduction of non-recurring profit and 6,128,351.99 21,406,535.65 -71.37% 45,862,588.97
loss
Net cash flow from operating activities -13,142,427.45 12,695,071.81 -203.52% -119,657,885.64
Basic earnings per share 0.025 0.106 -76.42% 0.13
Diluted earnings per share 0.025 0.106 -76.42% 0.13
Weighted average return on net asset yield 0.64% 2.63% Decrease 1.99 percentage points 3.21%
Increase/decrease compared
2020.12.31 2019.12.31 2018.12.31
with previous year
Total assets 5,681,568,328.36 5,525,503,256.26 2.82% 5,568,279,452.26
Owner's equity attributable to shareholders of listed
3,375,609,788.07 3,379,565,029.89 -0.12% 3,377,633,617.02
companies
The net profit attributable to shareholders of listed companies declined significantly compared with the same
period last year，the main reasons are as follows: 1. There was a large amount of non-recurring income in the same
period last year, details as follows: (1) The Gain from change in fair value of Guotai Junan has been recorded into
the current profit and loss since Jan. 1, 2019, which is about 42.33 million yuan; (2) During the same period of
last year, the Company's exchangeable corporate bondholders exchanged a total of 8.3889 million shares,
increasing the current investment income about 40.57 million yuan. 2.During the reporting period, there are large
amount of non-recurring losses, mainly due to that the negative change in fair value of Guotai Junan has made the
Company loss about 10.53 million yuan in 2020.3.In 2020, the profit of associated companies of the Company
realized a reduction in profits, the Company's investment income decreased accordingly.
The lower of the Company’s net profit before and after deduction of non-recurring gains and losses in the most
recent three fiscal years are all negative, and the audit report in the last year shows that the Company's ability to
continue operations is uncertain
□ Applicable √ Not applicable
The lower of the net profit before and after non-recurring gains and losses is negative
□ Applicable √ Not applicable
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VII.1.Difference of accounting data between as per Chinese accounting standards and as per
International Accounting Standards
□ Applicable √ Not applicable
2. Difference of accounting data between as per Chinese accounting standards and as per
Foreign Accounting Standards
The difference of accounting data between as per Chinese Accounting Standards and as per International
Accounting Standards was 0.
3.Explanation of reasons for differences in accounting data under domestic and foreign
accounting standards
√Applicable □Not applicable
The difference of accounting data between as per Chinese Accounting Standards and as per International
Accounting Standards was 0.
VIII. The quarter main financial indicators
the first quarter the second quarter the third quarter the fourth quarter
Operating revenue 463,218,112.74 410,185,301.72 462,998,187.84 390,866,332.85
Net profit attributable to shareholders of listed companies -58,673,476.79 35,069,131.27 27,947,259.43 16,998,219.48
Net profit belonging to the shareholders of listed companies
-29,177,871.92 20,920,876.93 10,312,723.62 4,072,623.36
after the deduction of non-recurring profit and loss
Net cash flow from operating activities -81,344,046.60 2,993,357.85 -18,397,809.85 83,606,071.15
IX. Non-recurring profits and losses and their amounts
item 2020 2019 2018
Disposal gains and losses of non-current asset -169,550.05 1,132,131.30 374,143.29
Government subsidies included in current profit or loss 17,952,461.57 3,707,100.00 8,124,911.87
Earnings from the Company get subsidiaries, associated
companies and joint venture investment cost less than get
1,070,288.17
investment should enjoy the invested entity produced by
the fair value of the identifiable net assets yield
Debt restructuring gains and losses 1,999,241.94
Disposal gains from investments on financial assets
available for sale, and gains from fair value change of 4,362,148.57 72,282,942.52 66,702,217.88
financial assets available for sale
Reversal of provision for impairment of accounts
receivable and contract assets under separate impairment
test
Other non-operating revenue or expense -4,643,229.90 481,549.43 29,037.03
Others 554,176.99
Influence on income tax 1,995,261.63 12,122,009.11 11,478,840.61
Influence on minority shareholders 293,787.16 329,555.29 181,170.70
Total 15,212,781.40 67,705,577.78 64,640,586.93
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Section 3 The Company's Business profile
I. The Company’s Main business during the reporting period
The Company revolves around hot and cold businesses, is committed to developing Industrial refrigeration and
heating business field, commercial refrigeration and refrigeration business field, air-conditioning and environment
business field, core parts business field, engineering and service business field have covered the key areas of the
cold and hot industrial chain and forged the complete cold and hot industrial chain in China.
II. Major changes in main assets
1. Major changes in main assets
Main assets Explain for major changes
Significantly increased on a year-on-year basis, mainly because the Company's unfinished
Inventories
construction projects increased in the current period
Significantly increased on a year-on-year basis, mainly because changes to adjust the value-added
Other current assets
tax credit in the current period
Significantly increased on a year-on-year basis, mainly because the Company’s subsidiary，Wuhan
Investment property
New World Refrigeration leased part of the plant to be transferred in the current period
2. The main overseas assets
□ Applicable √ Not applicable
III. Analysis of core competence
The Company focuses on main business of cold and heat; independent R&D and joint venture
partnerships are cooperate with each other effectively; capital resources integration and business
model innovation are in a positive interaction; the community of business and interest are being
multi-storey created; the develop mode with Bingshan characteristic are formed.
The Company has the integrated cold-heat industrial chain for offering kinds of comprehensive
solution services, including design, manufacture, installation and maintenance etc., and can satisfy
individual requirements preferably.
The Company possesses a mature and solid marketing networks and after-sale service network
on/off-line, and can offer high quality and high value-added services more initiative and faster for
clients from around the city.
After overall relocation reform, the new factory of intelligence, environment protection, high
efficiency and safety are put into used, which produces a strong advantage for creating higher value
to the customers.
While move forward with transformation and upgrading for former business, the Company will
implement the cultivation for new kinetic energy, thus the sustainable healthy development will
come more and more feasible.
Core-competency of the Company further promoted in the reporting period.
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Section 4 Management discussion and analysis
I. Summary
In 2020, the Company continued to focus on "exploitation, pragmatism, collaboration and action" to maintain
strategic momentum, strengthen development confidence, focus on hot and cold main businesses, deepen market
segmentation, continuously improve and innovate, and strive to achieve main business objectives. In 2020, the
company achieved operating income of 1,727,267,935.15 yuan, a decrease of 5.71% on a year-on-year basis; net
profit attributable to shareholders of listed companies was 21,341,133.39 yuan, a significant decrease on a
year-on-year basis. The substantial change in net profit was mainly due to the large amount of non-recurring
income in the same period last year, the large amount of non-recurring losses during the reporting period, and the
decrease in operating income of associates, which resulted in a corresponding decrease in the Company's
investment income.
During the reporting period, the Company made steady progress and operated prudently. The prevention and
control of the epidemic situation was carried out pragmatically, the production and operation were stable and
orderly, and the sales and orders steadily rebounded, and the improvement of main business achieved initial
results. Optimized the business and coordination system, and more closely integrated technology and market.
Renamed the Company, unified the trade name and trademark, enhanced the brand value of Bingshan, and
highlighted the Company's hot and cold main business.
During the reporting period, Wuhan New World Refrigeration, a subsidiary of the Company, faced the impact of
the epidemic and made efforts to reduce expenditure and increase revenue. Implemented flexible working system
to improve the efficiency of employees' on-the-job operations and reduce labor costs. Strengthened the recovery
of long-term debt and reduced asset impairment losses. Implemented product optimization to improve operational
stability. Set up a special team to strengthen the market expansion of standard products and energy products.
During the reporting period, Bingshan Engineering Company, a subsidiary of the Company, established a
professional work department to further develop its superior market segment. Taking advantage of the first class
qualifications, we won the bid for many representative projects such as carbon dioxide project, corn deep
processing project, central kitchen project, and ammonia system improvement project. The natural gas
liquefaction market achieved new developments, and LNG general contracting projects got new orders.
The installation of the freezing station for large air-cooled cold-storage transport boats that broke the monopoly of
foreign ships was completed.
During the reporting period, Bingshan Service Company, a subsidiary of the Company, accelerated digital
applications through online and offline two-wheel drives. Bingshan Industrial Refrigeration Technology
Service Cloud Platform was awarded as the "Service-oriented Manufacturing Demonstration Platform in Liaoning
Province" and has provided services for many Bingshan-funded enterprises. The machine room custody and
transportation business was steadily promoted, the layout of national service outlets was optimized in an orderly
manner, and the service capacity and management capabilities continued to be improved.
During the reporting period, Panasonic Appliances Compressor, the Company's associated company, continued to
promote its transformation. Through the reform of the marketing system and the optimization of the product
structure, the focus of sales has shifted from large customers to small and medium-sized customers, from the light
commercial air-conditioning field to the multi-field coordinated development of refrigeration, rail transit and other
fields. The CO2 two-stage rolling rotor compressor for rail transit air-conditioning was selected as the "Innovative
Product of China Refrigeration Expo 2020". It was awarded as the "Enterprise Technology Center in Liaoning
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Province". As the scroll compressor continuously being replaced by the rotor compressor in the light commercial
air-conditioning field and affected by the decline in overseas sales, the net profit realized in 2020 decreased on a
year-on-year basis.
During the reporting period, Panasonic Appliances Cold Chain, an associate company of the Company, focused
on the new retail and new catering markets. On the basis of strengthening sales in the supermarket, focused on
core products such as refrigerating smart self pick-up cabinets, heating smart dining cabinets, and refrigerating
smart vending cabinets, and optimized contactless distribution/sales solutions. Due to the decline in overseas sales
and the existence of large equity transfer income in the same period last year, the net profit realized in 2020 had a
dramatic decline on a year-on-year basis.
During the reporting period, Panasonic Appliances Refrigeration, an associate company of the Company,
continued to improve its core competitiveness. Engineering orders increased significantly, and it signed 4
Olympic skating rink projects, and undertook several EPC projects. The optimization of the product structure was
accelerated, and the CO2 trans-critical piston compressor unit was sold. The full life cycle cold chain engineering
network cloud platform with integrated solutions as the core was built in an orderly manner, and digital
applications were firmly advanced. It was awarded as the "Gazelle Enterprise in Liaoning Province".
During the reporting period, Fuji Bingshan, an associate company of the Company, continued to adjust its
marketing model and strengthen its leading products. Reduced the traditional marketing model based on operators,
expanded the development of brand marketing, and promoted special marketing. Focused on leading products
such as beverage machines, coffee machines, and integrated machines to better utilize comparative advantages.
Affected by the financial strain of operators and the slowdown in market expansion, the net profit realized in 2020
had a dramatic decline on a year-on-year basis.
During the reporting period, Jingxue Company, an associate company of the Company, as an enterprise under
review for the initial public offering on the ChiNext of the China Securities Regulatory Commission, submitted
relevant applications to the ChiNext that started the pilot registration system, and was officially accepted by the
Shenzhen Stock Exchange on July 1, 2020, and passed the deliberation of the ChiNext Listing Committee on
December 29, 2020, it also needs to obtain a decision from the China Securities Regulatory Commission
approving the registration
During the reporting period, in order to further focus on the hot and cold main business and strengthen the
improvement of main business, the Company transferred all its 49% equity of Dalian Bingshan Group
Management Consulting Co., Ltd.
II. Analysis of main business
1. Summary
See the related content “Section 4 Business situation discussion and analysis” the “Summary”
2. Sales income and costs
(1) Sales income structure
2020 2019
Year-on-year
Proportion to the Proportion to the
Amount Amount increase/decrease
Sales costs Sales costs
Total sales income 1,727,267,935.15 100% 1,831,851,280.70 100% -5.71%
Refrigeration and
air-conditioning 1,680,314,480.42 97.28% 1,786,183,886.17 97.51% -5.93%
equipment
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Others 46,953,454.73 2.72% 45,667,394.53 2.49% 2.82%
Refrigeration and
air-conditioning 1,680,314,480.42 97.28% 1,786,183,886.17 97.51% -5.93%
equipment
Others 46,953,454.73 2.72% 45,667,394.53 2.49% 2.82%
Northeast China 1,537,646,235.13 89.02% 1,608,028,766.52 87.78% -4.38%
Central China 174,808,647.60 10.12% 208,593,617.94 11.39% -16.20%
East China 14,813,052.42 0.86% 15,228,896.24 0.83% -2.73%
(2) Main business structure
Increase/decrease of Increase/decrease
operating revenues of operating costs Increase/decrease of gross profit
Operating revenue Operating costs Gross profit
on a year-on-year on a year-on-year on a year-on-year basis
basis basis
By industry
Refrigeration and
1,680,314,480.42 1,401,374,951.04 16.60% -5.93% -5.55% Decrease 0.33 percentage points
air-conditioning
By product
Refrigeration and
1,680,314,480.42 1,401,374,951.04 16.60% -5.93% -5.55% Decrease 0.33 percentage points
air-conditioning equipment
By region
Northeast China 1,496,892,891.50 1,208,165,229.91 19.29% -1.97% -3.73% Increase 1.48 percentage points
Central China 168,608,536.50 180,807,368.55 -7.24% -30.89% -16.16% Decrease18.85percentage points
East China 14,813,052.42 12,402,352.58 16.27% -2.73% -4.93% Increase 1.93 percentage points
(3)Was the Company's sales income on material objects more than that on labor service?
√ Yes □ No
Year-on-year
Industry category Item 2020 2019
increase/decrease
Sales volume 1,911 1,909 1.05%
Main refrigeration unit for
Production output 1,916 1,917 -0.05%
industrial or commercial use
Inventory level 386 381 1.31%
Reason for change in the related data by 30% or higher on a year-on-year basis
□ Applicable √ Not applicable
(4)Major orders in the hand of the Company
□ Applicable √ Not applicable
(5) Sales cost structure
2020 2019
Proportion to the Year-on-year
Industry category Item Proportion to the
Amount Amount increase/decrease
operating costs operating costs
Direct materials 1,190,876,714.73 83.13% 1,282,680,299.30 84.52% -7.16%
Labor wages 136,954,335.52 9.56% 137,700,760.54 9.07% -0.54%
Refrigeration and Depreciation 41,327,601.39 2.88% 30,995,627.76 2.04% 33.33%
air-conditioning Utilities 16,693,515.58 1.17% 17,881,803.42 1.18% -6.65%
Others 46,671,942.69 3.26% 48,302,957.50 3.18% -3.38%
Total operating costs 1,432,524,109.91 100.00% 1,517,561,448.51 100.00% -5.60%
(6) Was the Company's consolidated range change during the reporting period?
□ Applicable √Not applicable
(7) Major change or adjustment in the Company's products or service in the reporting period
□ Applicable √ Not applicable
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(8) Information on the Company's major customers and major suppliers
Information on the Company's major customers
Total sales volume from top five customers (yuan) 251,344,680.79
Proportion of the total sales volume from top five customers to the annual sales volume 14.55%
Proportion of the related party total sales volume from top five customers to the annual sales volume 11.98%
Information on the Company's top five customers
Proportion to the annual
No. Name of customer Sales volume (yuan)
sales volume
1 Panasonic Cold-chain (Dalian) Co., Ltd 93,027,572.31 5.39%
2 Panasonic Refrigeration (Dalian) Co., Ltd. 45,338,115.66 2.62%
3 Wuyuan Runhaiyuan Industrial Co. Ltd 44,291,418.17 2.56%
4 BAC Dalian Co., Ltd. 37,735,772.48 2.18%
5 Panasonic Appliances Refrigerating System (Dalian) Co., Ltd. 30,951,802.17 1.79%
Total —— 251,344,680.79 14.55%
Information on the Company's major suppliers
Total purchase volume from top five suppliers (yuan) 173,531,987.04
Proportion of the total purchase volume from top five suppliers to the annual purchases volume 8.17%
Proportion of the related party total purchase volume from top five suppliers to the annual purchases volume 1.81%
Information on the Company's top five suppliers
Purchase Proportion to the annual
No. Name of supplier
volume (yuan) purchase volume
1 Longkou Longpeng Precision Copper Pipe Co. Ltd 40,572,093.26 1.91%
2 Shenyang Bao Gang Northeast Trade Co., Ltd. 39,257,230.01 1.85%
3 BAC Dalian Co., Ltd. 38,558,623.38 1.81%
4 Chengdu New World Refrigeration Equipment Engineering Co., Ltd. 27,592,207.60 1.30%
5 Weilian Heat Transfer Technology (Shanghai) Co., Ltd. 27,551,832.80 1.30%
Total —— 173,531,987.04 8.17%
3. Expenses
Increase/decrease of gross
2020 2019 Explain for major changes
profit on a year-on-year basis
Significantly decreased on a
year-on-year basis, mainly
because social relief,
transportation expenses were
Selling expenses 83,740,476.90 131,188,733.71 -36.17%
adjusted to contract performance
cost according to the new revenue
criteria during the reporting
period.
Administrative
160,295,370.53 185,737,215.53 -13.70%
expenses
Significantly increased on a
Financial expenses 26,479,309.37 18,469,090.71 43.37%
year-on-year basis, mainly
12 / 141
because interest expense and
exchange loss increased.
R&D expenses 49,158,256.78 50,649,518.17 -2.94%
4. R&D expenditure
During the reporting period, the Company focused on the deep enthalpy energy system solutions, focused on the
key market segments in the wide temperature zone, and actively promoted the research and development, trial
production and optimization of new products.
Information on R&D expenditure
2020 2019 Increase/decrease on a year-on-year basis
The quantity of the person engaged in R&D 268 253 5.93%
The quantity proportion of the person engaged in R&D 10.77% 10.35% Increase 0.42 percentage points
The spending amount on R&D（yuan） 57,382,896.29 64,272,675.78 -10.72%
R&D spending accounts for the proportion of revenue 3.32% 3.51% Decrease 0.19 percentage points
The amount of R&D investment capitalization（yuan） 0.00 0.00 0.00%
Capitalize R&D investment for the proportion of R&D
0.00% 0.00% 0.00%
spending
Reasons for the remarkable change in R&D spending accounts for the proportion of revenue compared with the
previous year
□ Applicable √ Not applicable
Reasons for the substantial changes in the capitalization rate of R&D investment and its rationality
□ Applicable √ Not applicable
5. Cash flows
Year-on-year
Item 2020 2019
increase/decrease
Sub-total of cash inflows from operating activities 1,639,373,926.67 1,500,287,936.95 9.27%
Sub-total of cash outflows from operating activities 1,652,516,354.12 1,487,592,865.14 11.09%
Net amount of cash flow generated in operating activities -13,142,427.45 12,695,071.81 -203.52%
Sub-total of cash inflows from investing activities 184,194,481.36 114,176,663.50 61.32%
Sub-total of cash outflows from investing activities 14,869,095.73 114,061,103.54 -86.96%
Net amount of cash flow generated in investing activities 169,325,385.63 115,559.96 146,426.00%
Sub-total of cash inflows from financing activities 390,021,419.37 499,485,150.64 -21.92%
Sub-total of cash outflows from financing activities 531,151,803.02 515,351,305.19 3.07%
Net amount of cash flow generated in financing activities -141,130,383.65 -15,866,154.55 -789.51%
Net increase in cash and cash equivalents 13,451,105.93 -3,176,079.91 523.51%
Reason for change in the related data by 30% or higher on a year-on-year basis
√ Applicable □ Not applicable
1.Net cash flow arising from operation activities decreased on a y-o-y basis, mainly because the Company's cash
for purchasing goods and accepting labor services increased in the current period.
2. Net cash flow arising from investing activities have a significant increase on a y-o-y basis, mainly because the
Company transferred the equity of Dalian Bingshan Group Management Consulting Co., Ltd. and received one
phase of transfer price.
3. Net cash flow arising from financing activities have a significant decrease on a y-o-y basis, mainly because the
Company's cash received through borrowing decreased in the current period .
Reason for remarkable difference between the cash flows from the Company's operating activities in the reporting
period and the net annual profit
√ Applicable □ Not applicable
There was a remarkable difference between the net amount of cash flow generated in operating activities of the
13 / 141
Company and the net annual profit in the reporting period, mainly due to that the proportion of returns on
investment to the total profit of the Company was higher.
III. Analysis of the non-main business
□ Applicable √ Not applicable
IV. Analysis of assets & liabilities
1. Remarkable change in assets
Monetary unit: RMB yuan
2020.12.31 2020.1. 1
Proportion Explain for major
Proportion to Proportion to the
Amount Amount increase/decrease changes
the total assets total assets
Increase 0.56
Monetary funds 373,445,731.67 6.57% 373,445,731.67 6.01%
percentage points
Decrease 2.94
Accounts receivable 817,011,955.75 14.38% 817,011,955.75 17.32%
percentage points
Increase in
inventories, mainly
because the
company's
unfinished
construction
projects
Increase 3.12 increased in the
Inventories 731,658,797.98 12.88% 731,658,797.98 9.76%
percentage points current period,
according to the
requirements of
the new income
standards,
income cannot be
recognized
income.
Increase0.48
Investment property 126,288,477.92 2.22% 126,288,477.92 1.74%
percentage points
Long-term equity Decrease1.97
1,597,241,363.62 28.11% 1,597,241,363.62 30.08%
investment percentage points
Decrease 2.28
Fixed assets 891,147,058.82 15.68% 891,147,058.82 17.96%
percentage points
Construction in Decrease0.06
34,254,599.42 0.60% 34,254,599.42 0.66%
progress percentage points
Decrease 1.45
Short-term loans 282,971,600.00 4.98% 282,971,600.00 6.43%
percentage points
Decrease 0.08
Long-term loans 160,000,000.00 2.82% 160,000,000.00 2.90%
percentage points
2. Assets & liabilities which are measured by fair value
√ Applicable □ Not applicable
Other non-current financial asset measured in fair value is 238,706,047.92 yuan at the year beginning，and
226,312,440.24 yuan at the year end, with a selling amount of 56,233,504.48 yuan.
14 / 141
3. Restrictions on asset rights as of the end of the reporting period
By the end of reporting period, the Company’s asset rights was limited, including monetary funds 58,467,271.18
yuan, the reason for the limitation is the deposit and the bank account were frozen; notes receivable 12,175,402.47
yuan, the reason for the limitation is bank pledge.
V. Analysis of investments
1.The overall situation
√ Applicable □ Not applicable
Investment in 2020(yuan) Investment in 2019(yuan) Amount of variation
1,597,241,363.62 1,662,181,009.14 -3.91%
2.The significant equity investment during the reporting period
□Applicable √Not applicable
3 The significant non-equity investment during the reporting period
□Applicable √Not applicable
4.The financial asset investment
(1) The securities investment
√ Applicable □ Not applicable
Account Changes in the Accumulativ
Initial ing profit and loss e change of
Stock Stock Book value at the Current sale Report period Book value in the Accounting Source
investment measure of the fair fair value
code abbreviation beginning amount profit and loss ending subjects of funds
cost ment value in this credited to
model period equity
fair Other
value Non-current Own
601211 Guotai Jun’an 12,910,008.00 238,706,047.92 -14,797,607.68 0.00 56,233,504.48 -9,450,704.56 226,312,440.24
measure financial funds
ment assets
total 12,910,008.00 -- 238,706,047.92 -14,797,607.68 0.00 56,233,504.48 -9,450,704.56 226,312,440.24 -- --
As of December 31, 2020, the Company has held 12,910,008 shares of Guotai Jun’an Securities Co., Ltd.
2,800,000 shares was sold in this period. The Company received cash bonuses 5,346,903.12 yuan.
(2) Derivative investment
□Applicable √ Not applicable
During the reporting period, the Company does not exist derivative investment.
5. The use of funds raised
□Applicable √ Not applicable
VI. The material assets and equity sale
1. The material assets sale
□Applicable √Not applicable
2. The material equity sale
√Applicable □Not applicable
The net The The Relati The Impl
Transactio Principl
profit impact of percent Related onship equity eme Discl
n price es of Discl
Counte Sold Sale contributed the sale age of transact with invol nted osur
(ten Equity osure
rparty equity date by the on the the net ion or the ved as e
thousand Sale Index
equity to Compan profit not counte has plan date
yuan) Pricing
the listed y contrib rparty all ned
15 / 141
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beginning equity erred
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the date of net
sale(ten profit
thousand of the
yuan) listed
compan
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After the
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Compan
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Comp Consulti The
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the funds
from this
equity
transfer
to
replenish
working
capital or
to repay
bank
loans.
VII. Analysis of major subsidiary companies and mutual shareholding companies
√ Applicable □ Not applicable
Unit: ten thousand yuan (except for registered capital)
Operating
registered Net profit
Company name Type The main business total assets net assets income
capital
Panasonic mutual Refrigeration, air RMB 10,500
68,834 18,970 68,426 3,246
Refrigerating shareholding conditioning thousand
16 / 141
System company equipment, metal
pressure vessels
and related parts,
construction and
installation
engineering
Commercial
Refrigeration
Equipment,
mutual Refrigeration
Panasonic JPY 4,650
shareholding Storage, Stainless 172,576 67,683 139,325 1,998
Cold-Chain million
company Steel Kitchen
Equipment and
Electrical
Appliances
mutual
Panasonic JPY 6,200
shareholding Scroll Compressor 155,551 117,110 90,581 8,193
Compressor million
company
New building
mutual
energy-saving RMB 81,000
Jiangsu Jingxue shareholding 105,053 55,888 77,279 6,021
board, refrigerated thousand
company
storage door
High-grade
mutual
building hardware, USD 18,064.5
Bingshan Metal shareholding 37,742 31,436 40,501 5,936
plumbing thousand
company
equipment
Subsidiary companies obtained or disposed in the reporting period
□Applicable √Not applicable
VIII. The structured corporate bodies which the Company controlled
□Applicable √Not applicable
IX. Development prospect of the Company
1. Industry development trend
In recent years, the refrigeration and air-conditioning industry has become more and more prominent in
consumption upgrades, food safety, and improvement of people's livelihoods, the high-end, intelligent, green and
service-oriented industries are developing rapidly, the fields, competitors, products and connotation of
competition are changing constantly.
In 2020, the refrigeration and air-conditioning industry was facing a more complicated and severe domestic and
foreign market situation, issues such as intensified market competition, increased cost pressures, and difficulties in
benefit improvement continue to plague the operation and development of the industry.
In 2021, the industry will continue to differentiate, competition will continue to intensify, difficulties and
opportunities coexist. The transformation and upgrading of major enterprises in the industry will be further
accelerated. Intelligent manufacturing, green manufacturing and service-oriented manufacturing will become
increasingly prominent, and the pace of high-quality development will be more robust.
17 / 141
2. Challenges and opportunities faced by the Company
(1) Opportunities faced by the Company
Energy saving, emission reduction and energy utilization efficiency have become the consensus of the whole
society; carbon trading market has been gradually launched; regional energy system and comprehensive
utilization of energy have been encouraged and supported by the state; ammonia refrigerant has been gradually
lifted; biomass natural gas market has gradually formed.
With the strong technology bases, innovative business model, backwardness advantages of the intelligent factory
and system advantages, the Company is capable of capturing the above opportunities in a good position.
(2) Challenges faced by the Company
The production license system is cancelled, and the traditional market competition is intensified; the cultivation of
energy conservation and emission reduction market still needs time; the transformation and upgrading process is
complex, and there may be significant risk factors that have not been identified.
3. Development planning of the Company
The Company will focus on the refrigeration and heating industries under the operation policy of innovation and
value creation, promote business integration with the parent company and subsidiaries as the core business,
integrate internal and external resources, upgrade the industrial chain, innovate business model, strengthen
technological innovation, improve and expand the business scale and development space, improve employees’
benefits and realize sustained, healthy and harmonious development, thus to become an enterprise trusted and
respected by customers, partners and the society.
4. Capital requirement and fund sourcing plan
In 2021, the capital expected to be required for the Company's production operation and capital operation will be
financed by its own funds and appropriate financing.
5. Main risks the Company faces and response measures
(1)Increasing market competition risk
Countermeasures: focus on refrigeration and heating industries, optimize business system, deeply plough market
segmentation and expand comparative advantage; improve intelligent manufacturing and service-based
manufacturing in an orderly manner; accelerate transformation and upgrading of the existing business; accelerate
cultivation of new businesses; create the Bingshan community of business and interest.
(2)Risk of slow marketing of new products and technologies
Countermeasures: create differentiated competitiveness of new products and technologies; strengthen the
construction of model projects and demonstration projects; strengthen technology marketing and service
marketing; make effective use of finance leasing, contract energy management and other innovative modes.
(3)Risk of high level of trade receivables
Countermeasures: effective inventory management and intensified management on trade receivables; enhance
quality of contract through intensified customer credit assessment and contract appraisal; effective control of
increase in trade receivables by reduction of guarantee deposits, taking bank credit instruments as guarantee
deposits and finance leasing; improve contract execution through stricter review on goods delivery, intensified
control on project construction and post-sale service; accelerate settlement of trade receivables with relatively
long aging through formulating special solutions and special incentive policies.
6. Business plan in 2021
In 2021, the Company will further focus on the hot and cold main business and market segments, focus on the
18 / 141
improvement of main business and the cultivation of new kinetic energy, continuously improve and innovate,
develop strengths and make up weaknesses, improve quality and efficiency, solidly enhance the core
competitiveness, and strive to achieve the main business objectives.
In 2021, the main business strategies are as follows:
(1) Business enhancement. Give full play to the combat effectiveness of the business system of "seven
departments and ten marketing regions", and form a marketing management mode with the business end as the
core. Strengthen information collection, grasp the whole process of information management and control, and
fully implement the project responsibility system management. Consolidate the inherent market, deeply cultivate
the market segments, and develop new markets. Strengthen service, improve customer loyalty, and establish new
partnership.
(2) Organization enhancement. Take the business flow as the link to establish a smooth and efficient system
process. Closed loop management to promote special affairs, strict process control. Optimize the personnel
structure and improve the incentive mechanism.
(3) Product enhancement. Optimize the existing products through standardized and skid design. Accelerate the
research and development of new products and technologies to meet the future technology development strategy
and market demand. Reduce R&D costs and improve product gross margin.
(4) Improvement of manufacturing power. Through process improvement and process optimization, reduce
processing procedures, shorten welding and assembly cycle, and improve production efficiency. Through the use
of new technology with equipment improvement, and tooling transformation, achieve quality improvement.
(5) Quality enhancement. Promote the rotation system, strengthen the team building, and ensure the effective
implementation of quality standards. According to the Company's changes, revise the relevant quality
management system documents, improve the system assurance. Strengthen supplier management and control,
improve the quality of outsourcing support. Strict internal management, supervise continuous improvement.
The above-mentioned business plan does not represent the earnings forecast of listed companies for the year of
2021. Whether it can be achieved depends on the changes of market conditions and the efforts of management
teams and other factors. There are great uncertainties. Investors should pay special attention to it.
X. Record of investigation, communication, and other activities in the reporting period
□Applicable √Not applicable
19 / 141
Section 5 Important Issues
I Profit distribution and dividend payment
By giving consideration to both the return to shareholders and the Company's long-term development, and in
combination of the Company's profit made in this year, the Company formulated the 2019 annual dividend
distribution plan of paying the cash of 0.3 yuan for every 10 shares. Reviewed and adopted at the Company's
general meeting, the Company's Board of Directors has implemented the plan in July 2020.
Formulation and implementation of the Company's cash dividend distribution policy in the reporting period
complied with the Company's Articles of Association and the general meeting's resolution, and the dividend
distribution standard and proportion were defined and clear and the applicable decision-making procedure and
system were complete. The independent directors agreed on it and the legal rights and interests of minority
shareholders were well protected.
Special notes to cash dividend payout policy
If the regulations of the Articles of Association or the requirements of the shareholders of
Yes
the company meeting are met:
If the dividend payout standard and proportion is definite and clear-cut: Yes
If relevant decision-making procedure and mechanism is complete: Yes
If the independent directors have performed their duties and played their due role: Yes
If small and medium shareholders have the opportunity to sufficiently express their
Yes
opinions and appeals and if their legal rights and interests are sufficiently protected:
If the condition and procedure for adjusting or changing the cash dividend payout policy
Yes
is compliant and transparent:
Table of profit distribution plan, plan of share-granting with capital accumulation fund of the Company in recent
three years
Dividend Plan of share-granting with capital accumulation
Profit distribution plan
year fund
2020 RMB 0.1 yuan (cash) for every 10 shares (including tax) none
2019 RMB 0.3 yuan (cash) for every 10 shares (including tax) none
2018 RMB 0.5 yuan (cash) for every 10 shares (including tax) none
Dividends in the annual consolidated net income Accounted for in the consolidated net
Cash dividend amount
year attributable to common shareholders of the income attributable to common
(tax included)
Company shareholders of the Company
2020 8,432,125.07 21,341,133.39 39.51%
2019 25,296,375.21 89,112,113.43 28.39%
2018 42,160,625.35 110,503,175.90 38.15%
The Company made profit in the reporting period and the undistributed profit of the parent company was positive
but no cash dividend distribution plan was proposed.
□ Applicable √ Not applicable
II Profit distribution preplan, and preplan of share-granting with capital accumulation fund
of the Company
Bonus shares to be presented for every 10 shares (shares) 0
Dividend to be distributed for every 10 shares (RMB yuan) (including tax) 0.1
Equity base for distribution preplan (shares) 843,212,507
Total amount of cash dividend distribution (RMB yuan) (including tax) 8,432,125.07
Profit distributable to the shareholders in the current year 990,593,941.49
20 / 141
Proportion of cash dividend distribution accounting for total profit distribution 100%
Cash dividend distribution policy:
When the development stage of the company belongs to a growth period with important fund disbursement arrangement(s), the
proportion of cash dividend distribution accounting for this profit distribution should reach 20% at minimum when conducting profit
distribution.
Notes to details about preplan for profit distribution or capital stock increase with capital reserve
According to the audit by ShineWing CPAs (Special General Partnership), the net profit made by the parent company of the Company
in 2020 was RMB 63.927 million and 10% of the net profit (RMB 6.393 million) was drawn as the legal surplus reserve. Therefore,
the profit distributable to the shareholders in the current year was RMB 57.534 million.
Plus the initial undistributed profit of RMB 988.765million and minus the dividend of RMB 25.296 million of common shares paid in
2019 and the drawn free surplus reserve of RMB 30.409 million (20%), the accumulated profit distributable to the shareholders was
RMB 990.594 million.
The Company’s profit distribution preplan for 2020:
Based on the net profit made by the parent Company of the Company in 2020 (63.927 million), 20% of the net profit (RMB
12.785million) will be drawn as the free surplus reserve;
Based on the total capital stock of 843,212,507 shares, the dividend of RMB 0.1 in cash (including tax) will be distributed for every
10 shares, the total cash dividend is RMB 8.432 million, and the cash dividend for B share is converted and paid in Hong Kong
dollars.
III Implementation of commitments
1. Commitments of the Company or its shareholders holding 5% or higher of the shares in the reporting
period or carried to the reporting period
□Applicable √Not applicable
2. The company's assets or projects have earnings forecasts, and the reporting period is still in the period of
earnings forecasts. The company explains the reasons why the assets or projects have reached the original
earnings forecasts.
□Applicable √Not applicable
IV. Non-operation capital occupation by holding shareholders and their related parties in the
listed company
□Applicable √Not applicable
The Company had no capital occupation by the holding shareholders and their related parties in the listed
company within this reporting period.
V. Explain to the “non standard audit report” from the board of directors, board of
supervisors of the Company
□Applicable √Not applicable
VI. Change in accounting policies, accounting estimates and accounting methods compared
with the financial statements of the previous year
√Applicable □Not applicable
On July 5th, 2017, the Ministry of Finance announced amendment to “Accounting Standards for Business
Enterprises No.14-income "(No22 Caikuai[2017]) (hereinafter referred to as “updated income standard”). Since
January 1, 2018, the updated income standard took effect for either the company both listed in overseas and
domestic or IFRS or Accounting Standards for Business Enterprises adoption of the company listed overseas. The
rest of domestic listed companies shall adopt the standard since January 1, 2020. When preparing the financial
statements for 2020FY, the policy has been adopted and the accounting has been done in accordance with this
standard.
VII. Correction of major accounting mistakes in the reporting period, which should be
retroactively restated
□Applicable √Not applicable
XIII. Change in the range of consolidated statements compared with the financial statements
of the previous year
□Applicable √Not applicable
21 / 141
IX. Engagement and dismissal of the accounting firm
Currently engaged accounting firm
Name of domestic accounting firm ShineWing CPAs (Special General Partnership)
Remuneration paid to the domestic accounting firm (in 10 thousand yuan) 107
Continuous audit service years of the domestic accounting firm 5
Name of certified public accountants with the domestic accounting firm Sui Guojun, Wang Dong
Continuous audit service years of the certified public accountants Sui Guojun 4 years, Wang Dong 5 years
If the CPA firm retaining was changed in this period
□Applicable √Not applicable
X. Facing suspend and terminate listing after the annual report disclosure
□ Applicable √ Not applicable
XI. Bankruptcy restructuring related matters
□ Applicable √ Not applicable
XII. Major lawsuit and arbitration issues
□ Applicable √ Not applicable
XIII. Punishment and rectification
□ Applicable √ Not applicable
XIV The credibility of companies and its controlling shareholder, actual controller
√ Applicable □ Not applicable
The controlling shareholder of the Company and the Company don’t exist situation such as unfulfilled the court’s
effective judgments or failed to pay duly a large amount of debt during the reporting period.
XV. The implementation and effect of equity incentive
□ Applicable √ Not applicable
XVI. Important associated transactions
1. Important associated transactions
In the reporting period, the total amount of normal associated transactions between the Company and associated
parties was 433,420 thousand yuan, accounting for 59.70% of the budgeted amount for the year 2020. This
included 129,840 thousand yuan, accounting for 46.37% of the budgeted amount for the year 2020, for purchasing
supporting products for package projects from associated parties, and 303,580 thousand yuan, accounting for
64.59% of the budgeted amount for the year 2020, from selling supporting parts and components to associated
parties.
2. Associated transactions related to purchases or sales of assets
√ Applicable □ Not applicable
In the reporting period, the Company sold its 49 percent equities of Bingshan Management Consulting, see
Section 5 “Other associated transactions” for details.
3. Important associated transactions with joint external investments
□ Applicable √ Not applicable
4.Current associated rights of credit and liabilities
□ Applicable √ Not applicable
5. Other associated transactions
√ Applicable □ Not applicable
To focus on hot and cold main businesses and strengthen the main business improvement, the Company and the
Company’s controlling shareholder Dalian Bingshan Group Co., Ltd. signed the "Equity Transfer Contract", the
Company transferred all the 49 percent equity of Dalian Bingshan Group Management Consulting Co., Ltd. to
Bingshan Group, the above matters were reviewed and approved at the 13th meeting of the 8th board of directors
of the Company on November 27, 2020, the Company's "Announcement on Related Transactions on Transfer of
Equity in Dalian Bingshan Group Management Consulting Co., Ltd." was disclosed in China Securities Journal
and www.cninfo.com.cn (2020-030) on November 28, 2020.
Related inquiries about major related transaction interim report disclosure website
Website of disclosed
Disclosure date of
Name of temporary announcement temporary
temporary announcement
announcement
Announcement on Related Transactions on Transfer of Equity
November 28th, 2020 www.cninfo.com.cn
in Dalian Bingshan Group Management Consulting Co., Ltd.
22 / 141
XVII. Major contract and its performance
1. Hosting, contracting and leasing status
(1) the hosting status
□ Applicable √ Not applicable
(2)the contracting status
□ Applicable √ Not applicable
(3) the leasing status
√ Applicable □ Not applicable
The 13th meeting of the 7th board of directors of the Company was held on April 22, 2017, and approved to rent
out the old plant and land located in No 888, South West RD, Shahekou Districit, Dalian to Bingshan Wisdom.
The lease contract is from April 1, 2017 to December 31, 2036. The Company has signed the “estate leasing
contract” with Dalian Bingshan Wisdom based on the requirement of utilization of old land and plant and new
business foster plan. Current year’s lease premium is RMB 8.19 million.
On July 31, 2014, the Company and Lingzhong Bingshan Refrigeration (Dalian) Co., Ltd. signed a supplementary
agreement to modify the house lease contract, and rent out the Building No. 6 of Workshop No. 106, Liaohe East
Road, Dalian Development Zone, to Lingzhong Bingshan Refrigeration (Dalian) Co., Ltd.. The rental area is
15,259.04 square meters, and lease period will end on July 16, 2029, the annual rent is RMB 3.81 million.
The Company's subsidiary Bingshan Lingxie signed a house lease contract with Dalian Jingxue Energy Saving
Technology Co., Ltd. on June 1, 2017., and rent out the factory building located at No. 92 Tieshan West Road,
Dalian Development Zone, to Dalian Jingxue Energy Saving Technology Co., Ltd.. The rental area is 3,653.76
square meters, and lease period from June 1, 2017 to May 31, 2022, the annual rent is RMB 1.08 million. And it
also rent out the room 201, Building 4, No. 92 Tieshan West Road, Dalian Development Zone, to Dalian Jingxue
Energy Saving Technology Co., Ltd..The rental area is 25 square meters, and lease period from June 1, 2017 to
May 31, 2022, the annual rent is RMB 15 thousand.
2. Guaranteeing status
□ Applicable √ Not applicable
3. Entrust others to cash assets management
(1)Trust management
□Applicable √Not applicable
(2)Entrusted loans
□Applicable √Not applicable
(3)Other important contracts
□ Applicable √ Not applicable
XVIII. Social responsibilities
√Applicable □ Not applicable
1. Performance of precise poverty alleviation social responsibility
(1) Overview of the annual targeted poverty alleviation
In 2020, to reflect social responsibility, the Company carried out assistance work from three aspects: "education
assistance", "infrastructure improvement", and "consumer poverty alleviation":
First, poverty alleviation in education, the Company established Bingshan Love Education Center in Songlin
Village, provided education and support to children from poor families, let more children from poor families can
go to school and have books to read.
Second, poverty alleviation in infrastructure, the Company meets the needs of propaganda facilities in Songlin
Village and sponsored Songlin Village to build a village-level wireless broadcasting system project.
Third, poverty alleviation in consumption. Support Guizhou goods to connect, through the purchase of local
characteristics of liupanshui products, consumer support work.
23 / 141
2. Performance of other social responsibility
For the specific performance of social responsibilities by the Company, refer to the social responsibility report for
2020.
The listed company and its subsidiaries whether belong to heavy pollution industry formulated by the state
environmental protection department
□Yes √ No
Main Distribution Pollutant
Number of Total Excessiv
pollutant Way of of the Emission discharge Total
Enterprise or subsidiary discharge approved e
and discharge discharge concentration standard discharge
outlet emissions emission
features outlet implemented
Bingshan Refrigeration & Heat Unified DB21 Not over
COD sequence 1 154 ㎎/L 3.18 tons None
Transfer Technologies Co., Ltd. discharged standard
1627-2008
Bingshan Refrigeration & Heat Ammonia Unified DB21 Not over
sequence 1 5.43 ㎎/L 0.055 tons None
Transfer Technologies Co., Ltd. nitrogen discharged standard
1627-2008
Bingshan Refrigeration & Heat Unified Not over
Dust sequence 1 10.6mg/m3 GB9078-1996 2.75 tons None
Transfer Technologies Co., Ltd. discharged standard
The Company received the new version of the "Sewage Discharge Permit" issued by the Dalian Ecological
Environment Bureau in July 2020. The Company discharges within the limit according to the required emission
concentration of the new version of "Sewage Discharge Permit".
XIX. Other important matters
□ Applicable √ Not applicable
XX. Other important matters of subsidiary company
□ Applicable √ Not applicable
24 / 141
Section 6 Change in Share Capital and Shareholders' Information
I. Change in share capital
1. Change in share capital
Shares Shares
（before change） （after change）
items
number proportion number proportion
I. Non-circulating share capital with restricted trade
3,058,879 0.36% 3,058,879 0.36%
conditions
II. Circulating share capital 840,153,628 99.64% 840,153,628 99.64%
1. Domestically listed ordinary shares 598,653,628 71.00% 598,653,628 71.00%
2. Domestically listed foreign shares 241,500,000 28.64% 241,500,000 28.64%
III. Total shares 843,212,507 100.00% 843,212,507 100.00%
The reason for the Change in share capital
During the reporting period, the Company’s supervisor Zhao Huiming has left office for half a year, his share
lock-up ratio is restored to 75%, and the Company’s share capital structure remained unchanged from the
beginning of the year.
Approval of changes in shares
□ Applicable √Not applicable
The restricted shares changes
□ Applicable √Not applicable
II. Securities issuance and listing
1. Securities issuance in the report period
□ Applicable √ Not applicable
2. Change in total shares of the Company and structure of shareholders
□ Applicable √ Not applicable
3. Internal staff shares
□ Applicable √ Not applicable
III. Shareholders and actual controller
1. Number of shareholders and their shareholding
25 / 141
Total number of shareholders in the Total number of shareholders as of the last month before
54,931 45,887
reporting period disclosure of the annual report
Shareholding of top ten shareholders
Number of Number of
Proporti shares with pledged
Name Nature Total number
on sale shares or
restriction shares frozen
Domestic non-state-owned
Dalian Bingshan Group Co., Ltd. 20.27% 170,916,934 0 0
legal person
Sanyo Electric Co., Ltd. Overseas legal person 8.72% 73,503,150 0 0
Lin Zhenming Foreign natural person 0.80% 6,740,000
Zhang Sufen Domestic natural person 0.60% 5,100,000
Wu An Domestic natural person 0.53% 4,500,000
Sun Huiming Domestic natural person 0.52% 4,384,079
Xue Hong Domestic natural person 0.42% 3,550,000
Dalian industrial development investment Co., Domestic non-state-owned
0.40% 3,406,725
Ltd. legal person
Kong Guiyan Domestic natural person 0.37% 3,108,054
Li Xiaohua Domestic natural person 0.36% 3,062,908
Shareholding of top ten shareholders without sale restriction
Number of shares
Name Type of shares
without sale restriction
Dalian Bingshan Group Co., Ltd. 170,916,934 RMB denominated ordinary shares
Sanyo Electric Co., Ltd. 73,503,150 Domestically listed foreign shares
Lin Zhenming 6,476,250 Domestically listed foreign shares
Zhang Sufen 5,100,000 RMB denominated ordinary shares
Wu An 4,500,000 Domestically listed foreign shares
Sun Huiming 4,384,079 Domestically listed foreign shares
Xue Hong 3,550,000 Domestically listed foreign shares
Dalian industrial development investment Co., Ltd. 3,406,725 RMB denominated ordinary shares
Kong Guiyan 3,108,054 RMB denominated ordinary shares
Li Xiaohua 3,062,908 RMB denominated ordinary shares
Dalian Bingshan Group Co., Ltd. had the association
Notes to the associated relationship and uniform actions of the above relationship with Sanyo Electric Co., Ltd. among the above
shareholders shareholders. Sanyo Electric Co., Ltd. holds 26.6% of Dalian
Bingshan Group Co., Ltd.'s equity.
26 / 141
2. Controlling shareholder of the Company
Legal Founding Unified social
Name of holding shareholder Main business
representative date credit code
Research, development, manufacture, sales,
service and installation of industrial refrigeration
products, freezing and cold storage products,
91210200241 large-, medium- and small-size air-conditioning
Dalian Bingshan Group Co., Ltd. Ji Zhijian Jul. 3, 1985
2917931 products, petrochemical equipment products,
electronic and electric control products, home
appliance products and environment protection
products.
Shares held by the holding
shareholder in other overseas and
domestic listed companies as the None
holding shareholder or ordinary
shareholder in the reporting period
Change in the holding shareholder in the reporting period
□ Applicable √ Not applicable
3. Actual controller of the Company
The company has no actual controller.
According to the actual situation of the Company and its controlling shareholder, and compared with the related
laws and regulations including Company Law of People’s Republic of China, Management Regulation on Listing
Company Acquisition and Stock Listing Rules of Shenzhen Stock Exchange, with the confirmation of Liaoning
Huaxia law firm, the Company released the Public Notice on Not Having Actual Controller.(No: 2015-025),)
which was published on B04 of China Securities, A19 of HK Commercial Daily and Cninfo website on April 24
2015.
27 / 141
Commission ofDalian Municipality Government
State-owned Assets Supervision and Administration
Dalian State-owned Assets Management Co., Ltd.
Dalian Equipment Manufacture Investment
Panasonic Corporation of China
Dalan Zhonghuida Refrigeration
Sanyo Electric Co., Ltd.
Dayang Co., Ltd.
Technology Co., Ltd.
Co., Ltd.
100% 100%
24.97% 8.28% 13.3% 20.2% 26.6% 6.65%
Dalian Bingshan Group Co., Ltd.
20.27%
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
The actual controller controlled the Company through a trust or other asset management
□ Applicable √ Not applicable
4. Other legal-person shareholders holding of 10% or more shares
□ Applicable √ Not applicable
5.、controlling shareholders, actual controllers, restructuring the constraint to the stake and other
commitments underweight
□ Applicable √ Not applicable
28 / 141
Section 7 Information on Preferred Stock
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own preferred stock.
29 / 141
Section 8 Information on the Convertible corporate bonds
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own Convertible corporate bonds.
30 / 141
Section 9 Information on the Company’s Directors, Supervisors,
Senior Management and Staff
I. Changes in shareholding by directors, supervisors and senior managers
Shares held Increase on holding Decrease in Shares held at
Starting date Ending date
Office-holdi at beginning of shares in this holding of shares the end of
Name Position Sex Age of office of office
ng state of period period in this period period
term term
(shares) (shares) (share) (shares)
Mar. 27, Jan.17,
Ji Zhijian Chairman Incumbent M 54 1,528,830 0 0 1,528,830
2014 2022
Jan.17,
Ding Jie Vice Chairman Incumbent M 58 Jan. 21, 2016 525,000 0 0 525,000
2022
Mar. 27, Jan.17,
Xu Junrao Director Incumbent F 58 995,349 0 0 995,349
2014 2022
Jan.17,
Yokoo Sadaaki Director Incumbent M 58 June 5,2019 0 0 0 0
2022
Nishimoto Jan.17,
Director Incumbent M 54 June 5,2019 0 0 0 0
Shigeyuki 2022
Feb.12, Feb.12,
Dai Dashuang Independent director Incumbent F 70 0 0 0 0
2015 2021
Feb.12, Feb.12,
Liu Jiwei Independent director Incumbent M 60 0 0 0 0
2015 2021
May.20 May.20,
Wang Yan Independent director Incumbent F 57 0 0 0 0
2015 2021
Chairman of the board of Jan.17,
Hu Xitang Incumbent M 53 Jan. 17, 2019 0 0 0 0
Supervisors 2022
May.15, Jan.17,
Li Sheng Supervisor Incumbent M 41 0 0 0 0
2020 2022
Jan.17,
Dai Yuling Supervisor Incumbent F 43 Jan. 21, 2016 0 0 0 0
2022
Jan.17,
Yin Xide General manager Incumbent F 50 Jan.1, 2021 90,080 0 0 90,080
2022
Jan.17,
Ma Yun Chief Financial Officer Incumbent M 49 Jan. 21, 2016 35,000 0 0 35,000
2022
Jan.17,
Song Wenbao Board secretary Incumbent M 47 Feb. 5, 2013 593,880 0 0 593,880
2022
Otc.20, Mar.26,
Fan Yuekun Director DGM Leaving M 57 210,000 0 0 210,000
2015 2021
May.15,
Zhao Huiming Supervisor Leaving M 47 Jan. 17, 2019 190,447 0 0 190,447
2020
Total -- -- -- -- -- -- 4,168,586 0 0 4,168,586
On December 15, 2020, the Company held the 14th Board Meeting of the 8th session, according to
the needs of the Company's development, Mr. Ding Jie's position as the general manager of the
31 / 141
Company was dismissed; upon nomination by the chairman of the Company, Mr. Yin Xide was
appointed as the general manager of the Company, and his term of office ended on the expiration of
the term of office of the 8th board of directors of the Company. The formal dismissal and
appointment date is January 1, 2021.
The Company’s board of directors received written resignation reports from the Company’s
independent directors, Ms. Dai Dashuang and Mr. Liu Jiwei on March 19, 2021, because they have
been re-elected for six years, they applied to resign from the position of independent director of the
company. According to relevant regulations, the resignation reports of Ms. Dai Dashuang and Mr.
Liu Jiwei will take effect after the Company’s shareholders’ meeting elects new independent
directors to fill their vacancies.
On March 26, 2021, Mr. Fan Yuekun, the former director and deputy general manager of the
Company, submitted his resignation due to position change. He will not hold any position in the
Company after his resignation.
II. Changes of directors, supervisors, senior managers of the Company
Name Position held Type Date Reason
Zhao Huiming Supervisor Leaving office May.15,2020 Resign from the Company due to job changes
By-election of supervisors at general meeting of
Li Sheng Supervisor Elected May.15,2020
shareholders
Yin Xide General manager Appointed Jan.1, 2021 Appointed by the Board of Directors
Fan Yuekun Director DGM Leaving office Mar.26, 2021 Resign from the Company due to job changes
III Office holding
Professional background, main work experiences and the main duties and responsibilities of incumbent directors,
supervisors, senior managers of the Company
main duties and
Name Position held Professional background Main work experience
responsibilities
doctorate degree in
Successively acting as GM, Chairman of Panasonic Cold-Chain.; Related
management of the
Ji Zhijian Chairman Chairman and President of Dalian Bingshan Group Co., Ltd.; responsibilities of
Dalian University of
Chairman of the Company. the Chairman
Technology
graduate from Xi’an
Jiaotong University,
owed a master of Related
Successively acting as GM, Chairman of Wuhan new world
Ding Jie Vice Chairman business administration responsibilities of
Refrigeration Co., Ltd. ; Vice Chairman and GM of the Company.
of Huazhong University the Director
of Science and
Technology
The MBA and senior Successively acting as the Financial Majordomo, director of the Related
Xu Junrao Director
account Company; Vice President and chief accountant of Dalian Bingshan responsibilities of
32 / 141
Group Co., Ltd. the Director
graduated from Dalian
Successively acting as the Sales Director of Sales Division, Deputy
University of Related
General Minister and General Manager of Cryogenic Logistics Equipment
Yin Xide Technology with a major responsibilities of
manager Division of Panasonic Cold-Chain; served as GM of Panasonic
in thermal energy the GM
Appliances Refrigerating System (Dalian) Co., Ltd.
engineering
He has served as China president of Air conditioning Business
Company of Panasonic Corporation Appliances Company, Panasonic
Related
graduated from Corporation officer, executive officer and Chairman of Panasonic
Yokoo Sadaaki Director responsibilities of
Kumamoto university Corporation of China. He is now serves as Panasonic Corporation
the Director
executive officer, vice president of China & Northeast Asia Company,
Chairman of Panasonic Corporation of China.
He has served as the director of Financial Planning Room and
Finance Department System Overall Room of Panasonic Corporation Related
Nishimoto graduated from Meiji
Director Headquarter. He is now serves as director of Regional Financial responsibilities of
Shigeyuki university
Integration Room, Financial Center of Panasonic Corporation China the Director
& Northeast Asia Company.
professor, international
She serves as professor and doctoral tutor of the school of business Related
project management
Independent administration of Dalian university of Technology, the director of responsibilities of
Dai Dashuang appraiser, Chinese
director project management research center of Dalian university of the Independent
registered consulting
technology. director
engineer.
Related
doctor of management, He has served successively as the director of finance department,
Independent responsibilities of
Liu Jiwei professor of accounting, professor of the accountancy of Dongbei University of Finance and
director the Independent
CPA. Economics.
director
She has served successively as vice dean of law school of Dongbei
graduate from China Related
University of Finance and Economics, the director of Chinese society
Independent University of Political responsibilities of
Wang Yan of Economic Law ,the president of the Economics law seminar of
director Science and Law， the Independent
Liaoning Province law society, and the arbitrator of Dalian Arbitration
professor of law director
Commission.
Chairman of graduated from Nanjing Related
Hu Xitang Board of University of Science served as the chairman of the labor union of the Company. responsibilities of
Supervisors and Technology the Supervisor
graduated from Dalian Related
acting as the Director of Operation Management Department of
Li Sheng Supervisor University of responsibilities of
Dalian Bingshan Group Company Ltd.
Technology the Supervisor
Related
acting as the deputy chief of the Financial Dept. of Dalian Bingshan
Dai Yuling Supervisor Senior Accountant responsibilities of
Group Company Ltd.
the Supervisor
Chief He has served successively as the Deputy chief of the Financial Related
Ma Yun Financial The Accountant Management Dept. of the Company, the supervisor of the Company, responsibilities of
Officer and the Chief Financial Officer of Dalian Bingshan Group Sales Co., CFO
33 / 141
Ltd.
Related
Board graduate from Zhejiang Successively acting as representative for securities affairs, board
Song Wenbao responsibilities of
Secretary University，CFA secretary of the Company.
Board Secretary
Office holding in shareholder unit
√ Applicable □ Not applicable
If receiving remuneration or allowance from
Name of office holder Shareholder unit name Position held in shareholder unit
shareholder unit
Ji Zhijian Dalian Bingshan Group Co., Ltd. Chairman of the Board, President Yes
Xu Junrao Dalian Bingshan Group Co., Ltd. Vice President and chief accountant Yes
Office holding in other units
√ Applicable □ Not applicable
If receiving
remuneration or
name unit name Position held in other unit
allowance from other
unit
Dalian Bingshan Group Management Consulting Co., Ltd. Chairman no
Ji Zhijian
Dalian Zhong Huida Refrigeration Technology Co., Ltd. Chairman no
Ding Jie Wuhan SCF Power Control Equipment Co., Ltd. Chairman no
Xu Junrao Dalian Bingshan Group Hua Hui Da Financial Leasing Co., Ltd., Chairman no
Dai Dashuang Dalian Heavy Industry Group Co., Ltd. Independent director Yes
Liu Jiwei Liaoning Cheng Da Co., Ltd. Independent director Yes
Liu Jiwei Ling Yuan Iron &Steel Co., Ltd. Independent director Yes
Wang Yan Dalian Linton NC Machine Co., Ltd. Independent director Yes
IV. Remuneration paid to directors, supervisors, and senior management
Decision-making procedure, decision-making basis and actual payment of remuneration for directors, supervisors
and senior management
Decision-making procedure: the Company's remuneration plan for directors and supervisors was proposed by the
Company's Remuneration and Evaluation Committee of the Board of Directors, and after approval by the Board
of Directors, submitted to the general meeting for adoption and put into effect. The Company’s remuneration plan
for senior management was put into effect after approval by the Company’s Board of Directors.
Decision-making basis: it was decided on the basis of main responsibilities and importance of the concerned
position and the remuneration level of similar positions in other similar enterprises and evaluated and rewarded
through the Company’s examination procedure for assets operation performance.
The total amount of remunerations actually ( pre-tax ) paid by the Company to directors, supervisors, and senior
management was 3.7921 million yuan.
Particulars about the annual remuneration of directors, supervisors and senior staff members
Annual remuneration and allowance( pre-tax )paid by the Company
Name
(ten thousand yuan)
Ji Zhijian 0
Xu Junrao 0
34 / 141
Ding Jie 88.39
Fan Yuekun 74.37
Yokoo Sadaaki 0
Nishimoto Shigeyuki 0
Dai Dashuang 8.00
Liu Jiwei 8.00
Wang Yan 8.00
Hu Xitang 70.45
Dai Yuling 0
Li Sheng 0
Ma Yun 70.45
Song Wenbao 51.55
Zhao Huiming 0
Total 379.21
Equity incentive plans granted to directors, supervisors and senior management of the Company in the reporting
period
□ Applicable √ Not applicable
V. Status of the Company's staff
1. As of Dec. 31, 2020 the Company and its subsidiary had 2,487 enrolled employees, including 1,337 persons
engaged in production; 336 persons engaged in marketing; 268 persons engaged in engineering and technology;
54 persons engaged in financing; and 492 persons engaged in management.
2. As of Dec. 31, 2020, among enrolled employees of the Company and its subsidiary, 75 persons have the
educational background of Master or higher; 716 persons have the educational background of university; 738
persons have the educational background of junior college; and 958 persons have the educational background of
secondary technical school or lower.
3.The statistical scope of the number of employees in this reporting period covers all subsidiaries, in the same
period of last year, the scope of statistics covers major subsidiaries such as Wuxin Refrigeration, Bingshan
Engineering, and Bingshan Service.
4. The Company applied the employee job performance wage system with distribution according to positions and
performance of an employee.
5. The Company formulated the annual training plan and gave purposeful training to an employee in consideration
of his/her post requirement.
6. Labor outsourcing
□ Applicable √ Not applicable
35 / 141
Section 10 Corporate Governance
I. Basic situation of corporate governance
Within the reporting period, the Company centered around the operation subject as “Leading innovation, Creating
value” with the theme "pioneering, practical, cooperative and action"”, relying on the opportunity of overall
relocation and transformation of the Company, to further deepen and perfect the normative internal control system
and upgrade the governing level of the Company continuously.
There were no problems with the Company concerning horizontal competition caused by restructures and other
reasons. The main normal associated transactions between the Company and the associated companies included
purchasing the supporting products for package projects from the associated companies, and selling the supporting
parts and components to the associated companies and providing them with the labor service. Associated
transactions between the Company and the associated companies are necessary for normal production and
operation and helpful for the Company’s healthy development, and therefore will continue. The Company will
strictly follow the related decision-making procedures and fulfill the obligation in information disclosure in order
to further regulate associated transactions.
Was there any deviation of the Company's corporate governance from the requirements in the Company Law and
China Securities Regulatory Commission's regulations?
□ Yes √ No
There was no deviation of the Company's corporate governance from the requirements in the Company Law and
China Securities Regulatory Commission's regulations.
II. Status of the Company's business, staff, asset, organization and finance separations from
the holding shareholder
The Company was separated from the holding shareholder in business, staff, asset, organization and finance, and
has the independent and complete business and operation capability.
III. Horizontal competitions
□ Applicable √ Not applicable
IV Shareholders’ general meeting convened in the reporting period
1. Annual Shareholders’ general meeting within this reporting period
The proportion of
Session number of meeting The type of the meeting participate date Disclosing date Disclosing index
investors
The 1st Extraordinary Shareholders’ Extraordinary Shareholders’ http://www.cnin
29.88% Jan.16, 2020 Jan.17,2020
General Meeting of 2020 General Meeting fo.com.cn
2019 Annual Shareholders’ general http://www.cnin
29.74% May 15, 2020 May 16, 2020
Annual Shareholders’ General Meeting meeting fo.com.cn
V. Independent directors’ execution of duties in the reporting period
1. Attendance of independent directors to the meetings of the Board of Directors and general meetings
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Attendance of independent directors to the meetings of the Board of Directors
Name of Failure to attend
Number of due board Number of Number of Number of
Number of in person for
independent meetings in the reporting attendances attendance by attendance by
absences successive two
director period on the spot communication proxy
times or not
Dai Dashuang 7 1 6 0 0 No
Liu Jiwei 7 1 6 0 0 No
Wang Yan 7 1 6 0 0 No
2. Objections to the related matters of the Company raised by independent directors
The independent directors have raised no objections to the related matters of the Company in the reporting period.
3. Other description of independent directors’ execution of duties
For details of the Company's independent directors' execution of duties, see the 2020 annual work report of the
independent directors of the Company.
VI.. Execution of duties of the special committees under the Board of Directors in the
reporting period
1. Execution of duties of the audit committee under the Board of Directors
With performance of its duty according to the Implementation Rules for the Audit Commission under the Board of
Directors and the Annual Reporting Work Rules for the Audit Commission, the Audit Commission under the
Board of Directors supervised the Company’s internal audit system and its implementation, audited the
Company’s accounting information and its disclosure and assessed the work of the external audit institution.
In the work of evaluation of a normative internal control system of the Company, the Auditing Commission
brought into play actively the duty of organization, leadership and supervision. According to the Company internal
control defect recognization standard, it examined and recognized the internal control defect recognization
summary table developed by the internal control evaluation work group of the Company, and had an examination
reading of the internal control evaluation report of the Company for 2020, believing that the status quo of the
internal control system of the Company complies with related requirements and with the actual situation of the
Company and it is being carried out satisfactorily. The internal control evaluation report of the Company for 2020
reflects the above facts accurately.
In the Company’s 2020 annual audit work, the Audit Commission conducted positive communication and
effective coordination with the audit institution ShineWing CPAs .The Audit Commission conducted
communication with the person in charge of the project of the audit institution on the audit work plan, schedule,
matters that should be noticed in audit and other matters and reached an agreement with them. In the process of
audit, they kept close information on the progress of audit work and urged the audit institution many times to
ensure the quality and schedule in the audit work. Through serious review of the Company’s annual finance report
and annual report after completion of the audit work, the Audit Commission believed that the Company’s finance
report was comprehensive and authentic, and the finance report and other information disclosed by the Company
were objective and true, having reflected the true annual financial status of the Company.
The Audit Commission believed that in the 2020 annual audit service for the Company, ShineWing CPAs
implemented the audit for the Company on the practicing basis of independency, objectivity and fairness and
strictly abided by the new accounting standards. They worked out a well-considered plan, allocated all necessary
personnel, positively contacted our Audit Commission and independent directors, and completed the 2020 annual
audit service for the Company through its industrious and conscientious working. It is suggested that ShineWing
CPAs should be reengaged as the auditing agency for the Company in 2021.
2. Execution of duties of the remuneration and evaluation committee under the Board of Directors
With performance of its duty according to the Implementation Rules for the Remuneration and Evaluation
37 / 141
Commission under the Board of Directors, the Remuneration and Evaluation Commission under the Board of
Directors examined the annual salary and remuneration level of the Company’s directors, supervisors and senior
executives, and believed that the decision-making procedure for salary and remuneration of the above persons and
the paying standard complied with the laws and regulations and the Company’s regulations, and the salary and
remuneration information disclosed in the Company’s Annual Report for 2020 was authentic and exact.
VII. Work of the Board of Supervisors
Was there any risk with the Company found by the Board of Supervisors in their supervision activities in the
reporting period?
□ Applicable √ Not applicable
The Board of Supervisors had no objections to the matters under supervision in the reporting period.
VIII. Performance evaluation and incentive system for senior management
The Company evaluated and rewarded senior management through the Company's examination procedure for
assets operation performance in the reporting period.
IX. The internal control system
1. Details of material weakness in the internal control found in the reporting period described in the report
on self-evaluation of internal control.
□ Applicable √ Not applicable
There was no material weakness in the internal control found in the reporting period.
2. Report on self-evaluation of internal control
Details of material weakness in the internal control found in the reporting period described in the report on
self-evaluation of internal control
There was no material weakness in the internal control found in the reporting period.
Date of disclosing the full text of the report on
Apr.24, 2021
self-evaluation of internal control
Disclosure reference to the full text of the For the 2020 annual report on self-evaluation of internal control
report on self-evaluation of internal control of the Company, visit the website www.cninfo.com.cn.
3. Internal control audit report
Description of the deliberation opinions in the internal control audit report
We think that as of Dec. 31, 2020, Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. had
maintained an effective internal control over the financial reports in all material aspects according to Basic
Enterprise Internal Control Specification and relevant regulations.
Date of disclosing the full text of
Apr. 24, 2021
the internal control audit report
Disclosure reference to the full text For the 2020 annual internal control audit report of the Company, visit the
of the internal control audit report website www.cninfo.com.cn.
Did the accounting firm issue the internal control audit report with nonstandard opinions?
□ Applicable √ Not applicable
Was the internal control audit report issued by the accounting firm consistent with the opinion in the
self-evaluation report of the Board of Directors?
√Yes □ No
38 / 141
Section 11 Information on Corporate Bonds
The Company’s non-public issuance of exchangeable corporate bonds was listed at the Shanghai Stock Exchange
on August 6, 2018. As of August 1, 2018, according to the using plan disclosed in the prospectus, the raised funds
of the Company’s non-public issuance of exchangeable corporate bonds have been used to repay bank loans. The
special account for the Company's 2018 exchangeable corporate bonds fund raising was cancelled in March 2019.
Till the reporting period, the Company's exchangeable corporate bondholders exchanged a total of 8.3889 million
shares.
39 / 141
Section 12 Financial Report
1. Opinion
We have audited the financial statements of Bingshan Refrigeration & Heat Transfer
Technologies Co., Ltd (“Bingshan Refrigeration & Heat Company”), which comprise
the consolidated as well as Company’s balance sheet as at 31 December 2020, the
Company’s and the consolidated income statement, cash flow statement and statement
of changes in shareholders’ equity for the year then ended, and the related notes to the
financial statements.
In our opinion, the accompanying financial statements of Bingshan Company present
fairly, in all material respects, the Company’s and the consolidated financial position as
at 31 December 2020, the Company’s and the consolidated results of operations and
cash flows for the year then ended in accordance with Accounting Standards for
Business Enterprises.
2. Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing for Chinese
Certified Public Accountants. Our responsibilities under those standards are further
described in the “Auditor’s Responsibilities for the Audit of the Financial Statements”
section of our report. We are independent of Bingshan Company in accordance with the
Code of Ethics for Chinese Certified Public Accountants, and we have fulfilled our
other ethical responsibilities of the code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit.
3. Key Audit Matters
Key audit matters are those matters that we consider, in our professional judgment, were
of most significance in our audit of the financial statements of the current period. These
matters were addressed in the context of our audit of the financial statements as a whole
and, in forming our audit opinion thereon, and we do not express a separate opinion on
these matters.
Revenue Recognition
Key Audit Matter How the matter was addressed in the audit
Revenue of Bingshan Refrigeration The main audit procedures carried out for
& Heat Company and its addressing the key audit matters are as follows:
subsidiaries mainly come from sales 1.Understand and evaluate effectiveness of
design and operation of the management ‘s
of products and installation. The key
internal control over revenue
40 / 141
concern about the sales revenue is 2.Carried out analytical review and evaluate the
due to the large sales quantities and reasonableness of sales income and gross profit
any potential misstatements existing margin by segmenting the business and sales in
conjunction with industry development and
in the revenue recognition within
actual situation of Bingshan Refrigeration &
the appropriate accounting period.
Heat Company.
Key concern about installation 3.Sampling test the sales contracts, identify the
income is because the accounting clause and terms in respect to the risk and
involved by significant accounting reward transfer of the ownership. Evaluate the
estimate and judgment. Having recognition timing of revenue of Bingshan
considered these matters, we Refrigeration & Heat Company whether is in
recognized revenue recognition as line with the accounting standards.
4.Sampling select product sales revenue record,
key audit matters.
reconcile to sales invoice, contracts, dispatch
note, acceptance note; Sampling select
installation sales revenue record, reconcile to
invoice, installation contracts and completion
report and Evaluate the recognition of revenue
whether is in line with the accounting standards
5.Checking actual installation cost by reviewing
the contract, invoice and supportive document
with signature for the equipment received to
evaluate the cost whether it really incurred.
6.Sampling select the transactions before and
after the balance sheet date, test the dispatch
note and other supporting documents so to
ensure whether the transaction is recorded into
the appropriate accounting period.
4. Other Information
The management of Bingshan Company (hereinafter referred to as the “Management”)
is responsible for the other information. The other information comprises the
information included in the Bingshan Company 2020 annual report, but does not
include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
41 / 141
misstatement of the other information, we are required to report that fact. We have
nothing to report in this regard.
5. Responsibilities of the Management and Those Charged with Governance for
the Financial Statements
The Management is responsible for the preparation of the financial statements in
accordance with Accounting Standards for Business Enterprises to achieve fair
presentation; and designing, implementing and maintaining internal control which is
necessary to enable that the financial statements are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing
Bingshan Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
the Management either intends to liquidate Bingshan Company or to cease operations,
or have no realistic alternative but to do so.
Those charged with governance are responsible to overseeing Bingshan Company’s
financial reporting process.
6. Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with
auditing standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are generally considered material if,
individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
During the course of audit in accordance with auditing standards, we exercise
professional judgment and maintain professional skepticism. We also carry out the
following works:
(1) Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our audit. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design
42 / 141
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of its internal control (this sentence would be
deleted in circumstance when we are also responsible to issue an opinion on the
effectiveness of internal control in conjunction with the audit of the financial
statements).
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the Management.
(4) Conclude on the appropriateness of the Management’s use of the going concern
basis of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on
Bingshan Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial statements in accordance with the auditing
standards or, if such disclosures are inadequate, we shall modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause Bingshan Company to cease to
continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements,
and also whether the financial statements represent the underlying transactions and
events
in a manner that achieves fair presentation.
(6) Obtain sufficient and appropriate audit evidence with respect to the financial
information of Bingshan Refrigeration & Heat entities or business activities, and issue
an audit opinion. We are responsible for guiding, supervising and performing group
audits and take full responsibility for audit opinions.
We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings etc., including
any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with those relevant ethical requirements regarding independence, and to communicate
with them all relationships and other matters that may reasonably be thought to bear on
our independence and related safeguards, where applicable.
From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the financial statements of
the current period and are therefore the key audit matters. We describe these matters in
43 / 141
our auditor’s report unless law or regulation prohibited public disclosure about the
matter or when, in rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
ShineWing Certified Public Accountants LLP CPA：Sui Guojun (Engagement Partner)
CPA：Wang Dong
China, Beijing April 22, 2021
44 / 141
II. Accounting statement
BALANCE SHEET
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. December 31, 2020 Unit: RMB Yuan
31-Dec-2020 31-Dec-2019
Items
Consolidation Parent Company Consolidation Parent Company
Current assets:
Monetary funds 373,445,731.67 208,325,740.71 332,119,146.22 175,586,251.46
Transaction financial assets
Financial assets which are measured by fair value and
which changes are recorded in current profit and loss
Derivative financial assets
Notes receivable 139,121,037.78 42,858,563.72 119,947,326.41 12,692,689.97
Accounts receivable 817,011,955.75 408,625,925.91 1,030,342,541.88 526,554,114.61
Receivables financing 61,737,282.56 5,752,810.30
Accounts in advance 154,481,509.35 62,620,914.33 142,786,528.57 44,560,934.56
Other receivables 67,527,176.86 41,183,397.14 38,731,228.57 5,981,993.82
Interest receivables 46,879.68 46,879.68 583,833.33 583,833.33
Dividend receivable 25,923.75 - 33,450.00
Inventories 731,658,797.98 255,635,206.96 539,497,213.39 212,558,464.52
Contract assets 91,430,011.60 38,366,253.50
Assets held for sale
Non-current asset due within one year 42,003,576.60 19,488,435.75
Other current assets 23,214,091.44 27,637.13 14,172,130.45 32,843.40
Total current assets 2,501,631,171.59 1,082,884,885.45 2,217,596,115.49 977,967,292.34
Non-current assets:
Finance asset held available for sales
Held-to-maturity investment
Long-term account receivable 65,867,973.25 45,964,783.15
Long-term equity investment 1,597,241,363.62 2,280,377,981.04 1,662,181,009.14 2,244,411,383.88
Other non-current financial assets 239,304,098.83 237,888,956.33 303,469,706.51 302,054,564.01
Investment property 126,288,477.92 100,762,366.02 96,200,507.24 106,536,035.96
Fixed assets 891,147,058.82 721,701,015.39 992,435,172.94 776,349,872.24
Construction in progress 34,254,599.42 9,160,965.22 36,285,056.80 27,212,183.40
Productive biological asset
Oil and gas asset
Intangible assets 145,442,721.24 76,619,078.55 141,540,378.10 68,221,989.91
Expense on Research and Development
Goodwill 1,750,799.49 1,750,799.49
Long-term expenses to be apportioned 9,660,538.07 8,259,220.68 11,646,845.47 9,751,998.84
Deferred income tax asset 68,979,526.11 13,940,130.98 62,397,665.08 13,858,811.66
Other non-current asset
Total non-current asset 3,179,937,156.77 3,494,674,497.36 3,307,907,140.77 3,548,396,839.90
Total assets 5,681,568,328.36 4,577,559,382.81 5,525,503,256.26 4,526,364,132.24
Current liabilities:
Short-term loans 282,971,600.00 276,011,600.00 355,252,000.00 308,082,000.00
Financial liabilities which are measured by fair value
and which changes are recorded in current profit and
45 / 141
loss
Derivative financial liabilities
Transaction financial liabilities
Notes payable 295,151,372.38 202,747,834.50 305,468,505.38 189,540,652.01
Accounts payable 767,267,232.43 254,630,956.73 814,331,684.02 293,479,043.69
Accounts received in advance 160,571,622.53 47,114,426.48
Contract liability 295,100,657.10 67,468,174.27
Wage payable 31,125,808.94 11,187,502.65 31,701,317.58 8,702,907.01
Taxes payable 9,714,194.25 4,244,948.37 8,184,018.69 5,156,115.24
Other accounts payable 43,017,466.38 17,179,194.67 55,921,060.69 18,817,980.14
Interest payable 1,839,166.81 1,839,166.81 6,396,385.83 6,386,700.29
Dividend payable 533,156.00 533,156.00 533,156.00 533,156.00
Liabilities held for sale
Non-current liabilities due within one year 37,157,126.41 25,000,034.00 14,174,643.42
Other current liabilities 152,173,946.30 50,815,558.18
Total current liabilities 1,913,679,404.19 909,285,803.37 1,745,604,852.31 870,893,124.57
Non-current liabilities:
Long-term loans 160,000,000.00 160,000,000.00 160,000,000.00 160,000,000.00
Bonds payable 25,000,034.00 25,000,034.00
Preferred stock
Perpetual bond
Long-term account payable 14,622,463.75 397,771.84
Long-term wage payable
Special payable
Anticipation liabilities 7,592,239.01
Deferred income 104,457,568.86 64,121,068.86 99,157,538.52 55,744,166.29
Deferred income tax liabilities 32,010,364.83 32,010,364.83 41,215,205.99 41,215,205.99
Other non-current liabilities
Total non-current liabilities 318,682,636.45 256,131,433.69 325,770,550.35 281,959,406.28
Total liabilities 2,232,362,040.64 1,165,417,237.06 2,071,375,402.66 1,152,852,530.85
Shareholders’ equity
Share capital 843,212,507.00 843,212,507.00 843,212,507.00 843,212,507.00
Other equity instruments
Preferred stock
Perpetual bond
Capital public reserve 726,768,468.00 771,270,562.83 726,768,468.00 771,270,562.83
Less:Treasury stock
Other comprehensive income 2,501,459.77 1,539,359.10 2,501,459.77 1,539,359.10
Special preparation
Surplus public reserve 805,525,775.33 805,525,775.33 768,723,812.53 768,723,812.53
Generic risk reserve
Retained profit 997,601,577.97 990,593,941.49 1,038,358,782.59 988,765,359.93
Total owner’s equity attributable to parent company 3,375,609,788.07 3,412,142,145.75 3,379,565,029.89 3,373,511,601.39
Minority interests 73,596,499.65 74,562,823.71 -
Total owner’s equity 3,449,206,287.72 3,412,142,145.75 3,454,127,853.60 3,373,511,601.39
Total liabilities and shareholder’s equity 5,681,568,328.36 4,577,559,382.81 5,525,503,256.26 4,526,364,132.24
46 / 141
INCOME STATEMENT
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January- December, 2020 Unit: RMB Yuan
January- December, 2020 January- December 2019
Items
Consolidation Parent Company Consolidation Parent Company
I. Total sales 1,727,267,935.15 751,021,670.44 1,831,851,280.70 677,227,674.90
II. Total operating cost 1,767,653,636.63 779,075,429.84 1,920,595,965.21 746,664,200.62
Including: Operating cost 1,432,524,109.91 616,299,098.91 1,517,561,448.51 561,312,386.43
Taxes and associate charges 15,456,113.14 8,800,692.80 16,989,958.58 9,386,688.44
Selling and distribution expenses 83,740,476.90 41,031,582.10 131,188,733.71 57,280,038.71
Administrative expenses 160,295,370.53 77,436,050.28 185,737,215.53 85,785,825.70
R&D expenses 49,158,256.78 20,145,122.54 50,649,518.17 18,651,305.37
Financial expense 26,479,309.37 15,362,883.21 18,469,090.71 14,247,955.97
Including: interest expense 22,795,380.51 15,405,378.98 17,999,780.21 13,942,332.55
interest income 2,435,386.06 1,973,796.92 2,110,293.61 1,342,801.32
Add: Other income 20,104,570.39 5,367,222.70 5,122,993.56 200,000.00
Gain/(loss) from investment 104,437,155.73 115,121,934.09 168,766,187.22 174,727,840.51
Including: income from investment on affiliated
91,883,843.64 92,790,086.32 140,574,045.58 140,544,148.87
enterprise and jointly enterprise
Gain/(loss) from change in fair value -14,797,607.68 -14,797,607.68 49,800,725.36 49,800,725.36
Credit impairment loss (loss as “-“) -34,717,562.20 -5,231,482.28 -70,642,131.10 -15,348,019.44
Assets impairment loss (loss as “-“) -13,476,398.01 -12,846,106.32 -1,200,000.00
Gain/(loss) from asset disposal -169,550.05 -706,217.34 1,194,791.09 582,050.16
III. Operating profit 20,994,906.70 58,853,983.77 64,297,881.62 140,526,070.87
Add: non-business income 1,411,389.75 3,900.06 2,689,879.18 230.14
Less: non-business expense 8,141,253.63 108,725.25 271,747.60 80,558.30
IV. Total profit 14,265,042.82 58,749,158.58 66,716,013.20 140,445,742.71
Less: Income tax -8,584,766.51 -5,177,760.99 -19,408,657.83 -11,600,611.47
V. Net profit 22,849,809.33 63,926,919.57 86,124,671.03 152,046,354.18
(I) Net profit from continuous operation 22,849,809.33 63,926,919.57 86,124,671.03 152,046,354.18
(II)Net profit from discontinuing operation
Net profit attributable to parent company 21,341,133.39 63,926,919.57 89,112,113.43 152,046,354.18
Minority shareholders’ gains and losses 1,508,675.94 -2,987,442.40
VI. After-tax net amount of other comprehensive
incomes
After-tax net amount of other comprehensive
incomes attributable to owners of the Company
(I) Other comprehensive incomes that will not be
reclassified into gains and losses
1. Changes in net liabilities or assets with a
defined benefit plan upon re-measurement
2. Enjoyable shares in other comprehensive
incomes in invests that cannot be reclassified into
gains and losses under the equity method
(II) Other comprehensive incomes that will be
reclassified into gains and losses
1. Enjoyable shares in other comprehensive
incomes in invests that will be reclassified into gains
and losses under the equity method
2. Changes in the fair value of other debt
investments
47 / 141
3. Gains and losses on fair value changes of
available-for-sale financial assets
4. The amount of financial assets reclassified
into other comprehensive income
5. Held-to-maturity investments are reclassified
as saleable financial asset gains and losses
6.Others
After-tax net amount of other comprehensive
incomes attributable to minority shareholders
VII Total comprehensive income 22,849,809.33 63,926,919.57 86,124,671.03 152,046,354.18
Total comprehensive income attributable to parent
company 21,341,133.39 63,926,919.57 89,112,113.43 152,046,354.18
Total comprehensive income attributable to
1,508,675.94 - -2,987,442.40
minority shareholders
VIII. Earnings per share
(I) basic earnings per share 0.025 0.106
(II) diluted earnings per share 0.025 0.106
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Wang Jinxiu
48 / 141
CASH FLOW STATEMENT
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. January-December, 2020 Unit: RMB Yuan
January - December, 2020 January - December 2019
Items
Consolidation Parent Company Consolidation Parent Company
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing
1,538,738,032.26 697,805,239.15 1,417,012,800.61 535,357,771.94
labor services
Write-back of tax received 18,519,826.50 8,601,797.19 29,188,090.73 8,327,328.58
Other cash received concerning operating activities 82,116,067.91 30,807,494.95 54,087,045.61 11,312,270.00
Subtotal of cash inflow arising from operating activities 1,639,373,926.67 737,214,531.29 1,500,287,936.95 554,997,370.52
Cash paid for purchasing commodities and receiving labor
1,121,134,021.73 522,795,640.64 916,130,720.58 350,757,870.86
service
Cash paid to/for staff and workers 314,253,416.05 94,837,857.19 358,011,091.30 121,469,816.85
Taxes paid 70,148,337.99 38,287,456.09 69,484,985.96 20,464,873.54
Other cash paid concerning operating activities 146,980,578.35 47,268,602.90 143,966,067.30 38,098,271.01
Subtotal of cash outflow arising from operating activities 1,652,516,354.12 703,189,556.82 1,487,592,865.14 530,790,832.26
Net cash flows arising from operating activities -13,142,427.45 34,024,974.47 12,695,071.81 24,206,538.26
II. Cash flows arising from investing activities:
Cash received from recovering investment 3,196,000.00 2,800,000.00
Cash received from investment income 141,629,646.76 144,821,456.80 112,384,931.89 112,621,481.89
Net cash received from disposal of fixed, intangible and
1,624,834.60 972,185.00 1,791,731.61 910,000.00
other long-term assets
Net cash received from disposal of subsidiaries and other
37,744,000.00 37,744,000.00
units
Other cash received concerning investing activities
Subtotal of cash inflow from investing activities 184,194,481.36 186,337,641.80 114,176,663.50 113,531,481.89
Cash paid for purchasing fixed, intangible and other
14,869,095.73 10,438,744.28 114,061,103.54 108,473,985.73
long-term assets
Cash paid for investment 100,000,000.00
Net cash paid for achievement of subsidiaries and other
business units
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities 14,869,095.73 110,438,744.28 114,061,103.54 108,473,985.73
Net cash flows arising from investing activities 169,325,385.63 75,898,897.52 115,559.96 5,057,496.16
III. Cash flows arising from financing activities
Cash received from absorbing investment
Including: Cash received from absorbing minority
shareholders' equity investment by subsidiaries
Cash received from loans 333,531,600.00 315,011,600.00 461,162,100.00 358,082,000.00
Cash received from issuing bonds
Other cash received concerning financing activities 56,489,819.37 743,155.00 38,323,050.64
Subtotal of cash inflow from financing activities 390,021,419.37 315,754,755.00 499,485,150.64 358,082,000.00
Cash paid for settling debts 405,812,000.00 347,082,000.00 371,623,748.91 300,000,000.00
Cash paid for dividend and profit distributing or interest
47,142,841.87 45,119,746.25 59,750,220.60 51,085,785.39
paying
Including: dividends or profit paid by subsidiaries to
minority shareholders - - 118,455.63
Other cash paid concerning financing activities 78,196,961.15 23,123,472.43 83,977,335.68 48,309,544.36
Subtotal of cash outflow from financing activities 531,151,803.02 415,325,218.68 515,351,305.19 399,395,329.75
Net cash flows arising from financing activities -141,130,383.65 -99,570,463.68 -15,866,154.55 -41,313,329.75
49 / 141
IV. Influence on cash due to fluctuation in exchange rate -1,601,468.60 5,763.51 -120,557.13 -83,793.31
V. Net increase of cash and cash equivalents 13,451,105.93 10,359,171.82 -3,176,079.91 -12,133,088.64
Add: Balance of cash and cash equivalents at the period
301,527,354.56 174,843,096.46 304,703,434.47 186,976,185.10
-begin
VI. Balance of cash and cash equivalents at the period–end 314,978,460.49 185,202,268.28 301,527,354.56 174,843,096.46
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Wang Jinxiu
50 / 141
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2020.01-12 Unit: RMB Yuan
2020.01-12
Owners’ equity attributable to parent company
Items Other Retained Minority Total of owners’
Capital Lessen: Special Surplus equity equity
share capital comprehensive profits
surplus treasury stock reserve reserve
income
I. balance at the end of last year 843,212,507.00 726,768,468.00 2,501,459.77 768,723,812.53 1,038,358,782.59 74,562,823.71 3,454,127,853.60
1. Change of accounting policy
2. Correction of errors in previous
period
3. Merger of enterprises under the
same control.
II. Balance at the beginning of this
843,212,507.00 726,768,468.00 2,501,459.77 768,723,812.53 1,038,358,782.59 74,562,823.71 3,454,127,853.60
year
III. Increase/ decrease of amount in
36,801,962.80 -40,757,204.62 -966,324.06 -4,921,565.88
this year (“-” means decrease)
(I) Total comprehensive incomes 21,341,133.39 1,508,675.94 22,849,809.33
(II) Capital increased and reduced
by owners
1. Common shares increased by
shareholders
2. Capital increased by holders of
other equity instruments
3.Amounts of share-based
payments recognized in owners’
equity
4. Other
(III) Profit distribution 36,801,962.80 -62,098,338.01 -2,475,000.00 -27,771,375.21
1. Withdrawing surplus public
36,801,962.80 -36,801,962.80
reserve
2. Withdrawing general risk
preparation.
3. Distribution to all owners
-25,296,375.21 -2,475,000.00 -27,771,375.21
(shareholders)
4. Others
(IV) Internal carrying forward of
owners’ equity
1. New increase of share capital
from capital reserves
2. Convert surplus reserves to
share capital
3. Surplus reserves make up
losses
4. Carry forward retained earnings
from changes in defined benefit
plans
5. Others
(V) Specific reserve
1. Withdrawn for the period 3,239,077.20 3,239,077.20
2. Used in the period 3,239,077.20 3,239,077.20
(VI) Other
IV. Balance at the end of this
843,212,507.00 726,768,468.00 2,501,459.77 805,525,775.33 997,601,577.97 73,596,499.65 3,449,206,287.72
period
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Wang Jinxiu
51 / 141
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2020.01-12 Unit: RMB Yuan
2019.01-12
Owners’ equity attributable to parent company
Items Other Retained Minority Total of owners’
Capital Lessen: Special Surplus equity equity
share capital comprehensive profits
surplus treasury stock reserve reserve
income
I. balance at the end of last year 855,434,087.00 760,365,342.00 21,026,106.00 296,909,965.55 721,091,040.02 764,859,288.45 80,796,270.83 3,458,429,887.85
1. Change of accounting policy -294,408,505.78 274,180,778.57 -771,004.72 -20,998,731.93
2. Correction of errors in previous
period
3. Merger of enterprises under the
same control.
II. Balance at the beginning of this
855,434,087.00 760,365,342.00 21,026,106.00 2,501,459.77 721,091,040.02 1,039,040,067.02 80,025,266.11 3,437,431,155.92
year
III. Increase/ decrease of amount in
-12,221,580.00 -33,596,874.00 -21,026,106.00 47,632,772.51 -681,284.43 -5,462,442.40 16,696,697.68
this year (“-” means decrease)
(I) Total comprehensive incomes 89,112,113.43 -2,987,442.40 86,124,671.03
(II) Capital increased and reduced
-12,221,580.00 -33,596,874.00 -21,026,106.00 -24,792,348.00
by owners
1. Common shares increased by
-12,221,580.00 -33,596,874.00 -21,026,106.00 -24,792,348.00
shareholders
2. Capital increased by holders of
other equity instruments
3.Amounts of share-based
payments recognized in owners’
equity
4. Other
(III) Profit distribution 47,632,772.51 -89,793,397.86 -2,475,000.00 -44,635,625.35
1. Withdrawing surplus public
47,632,772.51 -47,632,772.51 -
reserve
2. Withdrawing general risk
preparation.
3. Distribution to all owners
-42,160,625.35 -2,475,000.00 -44,635,625.35
(shareholders)
4. Others
(IV) Internal carrying forward of
owners’ equity
1. New increase of share capital
from capital reserves
2. Convert surplus reserves to
share capital
3. Surplus reserves make up
losses
4. Carry forward retained earnings
from changes in defined benefit
plans
5. Others
(V) Specific reserve
1. Withdrawn for the period 2,050,672.98 2,050,672.98
2. Used in the period 2,050,672.98 -2,050,672.98
(VI) Other
IV. Balance at the end of this
843,212,507.00 726,768,468.00 2,501,459.77 768,723,812.53 1,038,358,782.59 74,562,823.71 3,454,127,853.60
period
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Wang Jinxiu
52 / 141
STATEMENT OF CHANGES IN OWNERS’ EQUITY
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2020.01-12 Unit: RMB Yuan
2020.01-12
Owners’ equity attributable to parent company
Items Lessen: Other Total of owners’
Other equity Capital Special Surplus Retained equity
share capital treasury comprehensive
instrument surplus preparation reserve profits
stock income
I. balance at the end of last
843,212,507.00 771,270,562.83 - 1,539,359.10 - 768,723,812.53 988,765,359.93 3,373,511,601.39
year
1. Change of accounting
policy
2. Correction of errors in
previous period
II. Balance at the beginning of
843,212,507.00 771,270,562.83 - 1,539,359.10 - 768,723,812.53 988,765,359.93 3,373,511,601.39
this year
III. Increase/ decrease of
amount in this year (“-” 36,801,962.80 1,828,581.56 38,630,544.36
means decrease)
(I) Total comprehensive
63,926,919.57 63,926,919.57
incomes
(II) Capital increased and
reduced by owners
1. Common shares increased
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in
owners’ equity
4. Other
(III) Profit distribution 36,801,962.80 -62,098,338.01 -25,296,375.21
1. Withdrawing surplus
36,801,962.80 -36,801,962.80
public reserve
2. Distribution to all owners
-25,296,375.21 -25,296,375.21
(shareholders)
3. Others
(IV) Internal carrying
forward of owners’ equity
1. New increase of share
capital from capital reserves
2. Convert surplus reserves
to share capital
3. Surplus reserves make up
losses
4. Others
(V) Specific reserve
1. Withdrawn for the period 3,239,077.20 3,239,077.20
2. Used in the period 3,239,077.20 3,239,077.20
(VI) Other
IV. Balance at the end of this
843,212,507.00 771,270,562.83 - 1,539,359.10 - 805,525,775.33 990,593,941.49 3,412,142,145.75
period
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Wang Jinxiu
53 / 141
Prepared by Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. 2020.01-12 Unit: RMB Yuan
2019.01-12
Owners’ equity attributable to parent company
Items Lessen: Other Total of owners’
Other equity Capital Special Surplus Retained equity
share capital treasury comprehensive
instrument surplus preparation reserve profits
stock income
I. balance at the end of last
855,434,087.00 804,867,436.83 21,026,106.00 295,947,864.88 721,091,040.02 640,251,261.47 3,296,565,584.20
year
1. Change of accounting
-294,408,505.78 286,261,142.14 -8,147,363.64
policy
2. Correction of errors in
previous period
II. Balance at the beginning of
855,434,087.00 804,867,436.83 21,026,106.00 1,539,359.10 721,091,040.02 926,512,403.61 3,288,418,220.56
this year
III. Increase/ decrease of
amount in this year (“-” -12,221,580.00 -33,596,874.00 -21,026,106.00 47,632,772.51 62,252,956.32 85,093,380.83
means decrease)
(I) Total comprehensive
152,046,354.18 152,046,354.18
incomes
(II) Capital increased and
-12,221,580.00 -33,596,874.00 -21,026,106.00 -24,792,348.00
reduced by owners
1. Common shares increased
-12,221,580.00 -33,596,874.00 -21,026,106.00 -24,792,348.00
by shareholders
2. Capital increased by
holders of other equity
instruments
3. Amounts of share-based
payments recognized in
owners’ equity
4. Other
(III) Profit distribution 47,632,772.51 -89,793,397.86 -42,160,625.35
1. Withdrawing surplus
47,632,772.51 -47,632,772.51 -
public reserve
2. Distribution to all owners
-42,160,625.35 -42,160,625.35
(shareholders)
3. Others
(IV) Internal carrying
forward of owners’ equity
1. New increase of share
capital from capital reserves
2. Convert surplus reserves
to share capital
3. Surplus reserves make up
losses
4. Others
(V) Specific reserve
1. Withdrawn for the period 2,050,672.98 2,050,672.98
2. Used in the period 2,050,672.98 -2,050,672.98
(VI) Other
IV. Balance at the end of this
843,212,507.00 771,270,562.83 1,539,359.10 768,723,812.53 988,765,359.93 3,373,511,601.39
period
Legal Representative: Ji Zhijian Chief Financial Official: Ma Yun Person in Charge of Accounting Organization: Wang Jinxiu
54 / 141
III. Notes to the accounting statement
(All amounts in RMB Yuan unless otherwise stated)
I. General Information
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd (the “Company”) previously named
as Dalian Refrigeration Company Limited, was reorganized and reformed from main part of former
Dalian Refrigeration Factory. On December 8, 1993, the company went to the public as a listed
company at Shenzhen Stock Exchange Market. On March 20, 1998, the company successfully
went to the public at B share market and listed at Shenzhen Stock Exchange Market with total share
capital of RMB350,014,975.00Yuan.
According to the 13th meeting of the 6th generation of board, extraordinary general meeting for 2015
fiscal year and ' Restricted share incentive plan (draft)' , the Company planned to introduce A
ordinary shares to incentive objectives, which was 10,150,000 number of shares would be granted to
41 share incentive objectives at granted price of RMB5.56Yuan per share. Up to March 12, 2015, the
Company received new added share capital of RMB10,150,000.00Yuan.
The general meeting for 2015 fiscal year held on April 21, 2016 approved the profit distribution
policy for the year of 2015, which agrees the profit distribution based on the total 360,164,975
number of shares as share capital, paid share dividend of 5 common shares for every 10 shares
through capital reserve. The policy stated above was fully implemented on May 5, 2016, and the
registered capital was altered to 540,247,462.00Yuan.
The 17thmeeting of the 6th generation of board was held on June 4, 2015 and the 2nd interim
shareholders’ meeting was held on June 24, 2015, meeting deliberated and passed the proposal of
non-public offering of ‘A shares’. China’s Securities Regulatory Commission issued SFC license
[2015]3137 on December 30, 2015, approving that new non-public offering cannot exceeded
38,821,954 numbers of shares. The company implemented the post meeting procedures for China’s
Securities Regulatory Commission, which is regarding adjustment of bottom price and the number of
the shares issued after the implementation of profit distribution policy of 2015 in May, 2016, and
accordingly revised the upper limit of non-public offering of share to58,645,096 number of new ‘A
shares’. The company issued the non-public offering of 58,645,096 number of ‘A shares’ to 7
investors, and as a result, the total number of shares of the company is changed to 598,892,558
shares, and the par value is 1yuan per share and the total share capital is 598,892,558.00Yuan.
According to the ‘Restricted Share Incentive Plan(draft) of Dalian Refrigeration Company Limited
for the year of 2016’ and the ‘Proposal regarding the shareholders’ meeting authorized the board of
directors to implement the Restricted Share Incentive Plan’ approved on the 3rd provisional general
meeting held on September 13, 2016, the 9th meeting of the 7th generation of board deliberated and
passed the ‘Proposal about granting the restricted shares to incentive targets’ on September 20, 2016
and set September 20 , 2016 as share granted date, and granted 12,884,000 number of restricted
shares to 118 incentive targets at granted price of 5.62Yuan per share. By November 22, 2016, the
company has actually received the newly subscribed registered share capital of 12,884,000.00Yuan
subscribed by incentive targets.
On May 19, 2017, the general meeting for 2016 fiscal year was held and profit appropriation scheme
for 2016 FY was approved, which was every 10 shares will be increased by 4 shares through capital
reserve based on the total 611,776,558 number of shares. After the profit appropriation scheme, the
registered capital was changed to RMB856,487,181.00Yuan.
On December 28, 2017, the company held the 3rd extraordinary shareholders meeting in 2017, and
reviewed and approved the “Proposal on Repurchasing and Retiring Partially Restricted Stocks of
the 2016 Restricted Stock Incentive Plan”. On March 8, 2018, after the company's repurchase and
cancellation, the company implemented the corresponding capital reduction procedures according to
law. The registered capital of the company was changed from 856,487,181.00Yuan to
855,908,981.00 Yuan.
On May 4, 2018, the company held the 21st meeting of the 7th Board of Directors, and reviewed and
approved the “Proposal on Repurchasing and Retiring Partially Restricted Stocks of the 2015
Restricted Stock Incentive Plan". On June 29, 2018, after the company's repurchase and cancellation,
the company implemented the corresponding capital reduction procedures according to law. The
registered capital of the company was changed from 855,908,981.00 Yuan to 855,434,087 .00Yuan.
On January 17th, 2019, the 1st interim shareholders’ meeting was held and approved for “Proposal on
Termination of the 2016 Restricted Stock Incentive Plan and Repurchasing and Retiring Restricted
Stocks Plan”. Up to February 25th, 2019, the company has completed the repurchasing and retiring
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stocks plan, respectively the company shall perform the corresponding capital reduction procedures
in accordance with the law and the registered capital decreased from 855,434,087.00Yuan to
843,212,507.00Yuan.
On December 20th, 2019, the company held the 7th meeting of the 8th Board of Directors and
approved to change the company’s name from Dalian Refrigeration Company Limited to Bingshan
Refrigeration & Heat Transfer Technologies Co., Ltd.
The old address of the Company’s registered office as same as head office is No.888 Xinan Road,
Shahekou District, Dalian, China. In 2017, the Company relocated to new factory and changed its
address to No.16 Liaohe East RD, Dalian Economic&Technology Development Zone(‘DDZ’),
Dalian China as same as HQ’s address. The parent company of the Company is Dalian Bingshan
Group Co., Ltd., and there is no ultimate controller regulated by the relevant law, regulations and
rules.
The company is in industrial manufacturing sector, mainly engaged in industrial refrigeration,
refrigerated and frozen food storage, and manufacture and installation of central air-conditioning and
refrigeration equipment. The scope of business includes research and development, design,
manufacture, sale, lease, installation and repair of refrigeration and heat equipment, accessories,
spare parts, and energy-saving and environmental protection products; Technical services, technical
consultation, technical promotion; Design, construction, installation repair and maintenance of
complete sets of refrigeration and air conditioning projects, mechanical and electrical installation
projects, steel structure projects, anti-corrosion and heat preservation works; Rental of premises;
Transport of ordinary goods; Property management; Low temperature storage; Import and export of
goods and technologies. (With the exception of projects subject to approval according to law,
independently carry out business activities according to law with the business license).
II. The scope of consolidation
There are 14 entities included in the current consolidated financial statements. This year, entities
within the consolidation scope aren’t changed comparing to last year. For the specific information of
the consolidation scope, see the notes of “VII. The Change of Scope of Consolidation” and “VIII.
The Equity in Other Entities”.
III. Financial Statements Preparation Basis
（1） Preparing basis
The Company’s financial statements are prepared on the basis of going concern assumption,
according to the actual occurred transactions and events and in accordance with ‘Accounting
Standards for Business Enterprises’ and relevant regulations, and also based on the note IV
“Significant Accounting Policies and Accounting Estimates”.
（2） Going concern
The company has the capacity to continually operate within 12 months at least since the end of
report period, and hasn‘t the major issues impacting on the sustainable operation ability.
IV. Significant Accounting Policies and Accounting Estimates
1. Declaration for compliance with accounting standards for business enterprises
The financial statements are prepared by the Group according to the requirements of Accounting
Standard for Business Enterprise, and reflect the relative information for the financial position,
operating performance, cash flow of the Group truly and fully.
2. Accounting period
The Group adopts the Gregorian calendar year as accounting period from Jan 1 to Dec 31.
3. Operating cycle
Normal operating cycle refers to the duration starting from purchasing the assets for manufacturing
up to cash or cash equivalent realization. The group sets twelve months for one operating cycle and
as the liquidity criterion for assets and liability.
4. Functional currency
The Group adopts RMB as functional currency.
5. Accounting for business combination under same control and not under same control
As an acquirer, the assets and liabilities that The Group obtained in a business combination under the
same control should be measured on the basis of their carrying amount in the consolidated financial
statements on the combining date. As for the balance between the carrying amount of the net assets
obtained by the combining party and the carrying amount of the consideration paid by it, the capital
surplus shall be adjusted. If the capital surplus is not sufficient to be offset, the retained earnings
shall be adjusted.
For a business combination not under same control, the asset, liability and contingent liability
obtained from the acquirer shall be measured at the fair value on the acquisition date. The
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combination cost shall be the fair value, on the acquisition date, of the assets paid, the liabilities
incurred or assumed and equity securities issued by the acquirer in exchange for the control of the
acquire, and sum of all direct expenses(if the combination is achieved in stages, the combination cost
shall be the sum of individual transaction). The difference when combination cost exceeds
proportionate share of the fair value of identifiable net assets of acquire should be recognized as
goodwill. If the combination cost is less than proportionate share of the fair value of identifiable net
assets of acquiree, firstly, fair value of identifiable asset, liability or contingent liability shall be
reviewed, and so the fair value of non-monetary assets or equity instruments issued in the
combination consideration , after review, still the combination cost is less than proportionate share
of the fair value of identifiable net assets of acquire, the difference should be recognized as
non-operating income.
6. Method of preparation of consolidated financial statements
All subsidiaries controlled by the Group and structured entities are within the consolidation scope.
If subsidiaries adopt different accounting policy or have different accounting period from the parent
company, appropriated adjustments shall be made in accordance with the Group policy in
preparation of the consolidated financial statements.
All significant intergroup transactions, outstanding balances and unrealized profit shall be eliminated
in full when preparing the consolidated financial statements. Portion of the subsidiary’s equity not
belonging to the parent, profit, loss for the current period, portion of other comprehensive income
and total comprehensive belonging to minority interest, shall be presented separately in the
consolidated financial statements under “minority interest of equity”, ”minority interest of profit and
loss”, “other comprehensive income attributed to minority interest” and “total comprehensive
income attributed to minority interest” title.
If a subsidiary is acquired under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. When preparing the comparative
consolidated financial statements, adjustments shall be made to relevant items of comparative
figures as regarded that reporting entity established through consolidation has been always there
since the point when the ultimate controlling party starts to have the control.
If a business consolidation under common control is finally achieved in stages, consolidation
accounting method shall be disclosed additionally for the period in which the control is obtained. For
example, if a business consolidation under common control is finally achieved in stages, when
preparing the consolidated financial statements, adjustments shall be made for the current
consolidation status as if consolidation has always been there since the point when the ultimate
controlling party starts to control. In preparation of comparative figures, asset and liability of the
acquiree shall be consolidated into the Group’s comparative financial statements, but to the extent no
earlier than the point when the Group and acquiree are both under ultimate control and relevant
items under equity in comparative financial statements shall be adjusted for net asset increased in
combination. To avoid the duplicated computation of net asset of acquiree, for long-term equity
investment held by the Group before the consolidation, relevant profit and loss, other comprehensive
income and movement in other net asset, recognized for the period between the combination date
and later date when original shareholding is obtained and when the Group and the acquiree are under
common control of same ultimate controlling party, shall be respectively used for writing down the
opening balance of retained earnings of comparative financial statements and profit and loss for the
current period.
If a subsidiary is acquired not under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. In preparation of the consolidated
financial statements, adjustments shall be made to subsidiary’s financial statements based on the fair
value of its all identifiable assets, liability or contingent liability on the acquisition date.
If a business consolidation under non-common control is finally achieved in stages, consolidation
accounting method shall be disclosed additionally for the period in which the control is obtained. For
example, if a business consolidation not under common control is finally achieved in stages, when
preparing the consolidated financial statements, the acquirer shall remeasure its previously held
equity interest in the acquiree at its acquisition-date fair value and recognize the resulting gain or
loss as investment income for the current period. Other comprehensive income, under equity method
accounting rising from the interest held in acquiree in relation to the period before the acquisition,
and changes in the value of its other equity other than net profit or loss, other comprehensive income
and profit appropriation shall be transferred to investment gain or loss for the period in which
the acquisition incurs, excluding the other comprehensive income from the movement on the
remeasurement of ne asset or liability of defined benefit plan.
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When the Group partially disposes of the long –term equity investment in subsidiary without losing
the control over it, in the consolidated financial statements, the difference, between disposals price
and respective disposed value of share of net assets in the subsidiary since the acquisition date or
combination date, shall be adjusted for capital surplus or share premium, no enough capital surplus,
then adjusted for retained earnings.
When the Group partially disposes of the long –term equity investment in subsidiary and lose the
control over it, in preparation of consolidated financial statements, remaining share of interest in the
subsidiary shall be remeasured on the date of losing control. Sum of the share disposal consideration
and fair value of remaining portion of shareholding minus the share of the net assets in the
subsidiary held based on the previous shareholding percentage since the acquisition date or
combination date, the balance of above is recognized as investment gain/loss for the period and
goodwill shall be written off accordingly. Other comprehensive income relevant to share investment
in subsidiary shall be transferred to investment gain /loss for the period on the date of losing control.
When the Group partially disposes of the long –term equity investment in subsidiary and lose the
control over it by stages, if all disposing transactions are bundled, each individual transaction shall
be seen as a transaction of disposal of a subsidiary by losing control. The difference between the
disposal price and the share of the net assets in the subsidiary held before the date of losing
control, shall be recognize as other comprehensive income until the date of losing control where it is
transferred into investment gain/ loss for the current period.
7. Joint arrangement classification and joint operation accounting
The Group’s joint arrangement includes joint operation and joint venture. For joint operation, the
Group as a joint operator shall recognize its own assets and its share of any assets held jointly, its
liabilities and its share of any liabilities incurred jointly, its revenue from the sale of its share of the
output arising from the joint operation, its share of the revenue from the sale of the output by the
joint operation; and its expenses, including its share of any expenses incurred jointly. When an entity
enters into a transaction with a joint operation in which it is a joint operator, such as a sale or
contribution of assets, it is conducting the transaction with the other parties to the joint operation and,
as such, the joint operator shall recognize gains and losses resulting from such a transaction only to
the extent of the other parties’ interests in the joint operation.
8. Cash and cash equivalent
The cash listed on the cash flow statements of the Group refers to cash on hand and bank deposit.
The cash equivalents refer to short-term (normally with original maturities of three months or less)
and liquid investments which are readily convertible to known amounts of cash and subject to an
insignificant risk of changes in value.
9. Translation of foreign currency
(1) Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bank of
China (“PBOC”) on the 1st day of the month when the transactions incurred. Monetary assets and
liabilities in foreign currencies are translated into RMB at the exchange rate prevailing at the balance
sheet day. Exchange differences arising from the settlement of monetary items are charged as in
profit or loss for the period. Exchange differences of specific borrowings related to the acquisition or
construction of a fixed asset should be capitalized as occurred, before the relevant fixed asset being
acquired or constructed is ready for its intended uses.
(2) Translation of foreign currency financial statements
The asset and liability items in the foreign currency balance sheet should be translated at a spot
exchange rate at the balance sheet date. Among the owner’s equity items except “undistributed
profit”, others should be translated at the spot exchange rate when they are incurred. The income and
expense should be translated at spot exchange rate when the transaction incurs. Translation
difference of foreign currency financial statements should be presented separately under the other
comprehensive income title. Foreign currency cash flows are translated at the spot exchange rate on
the day when the cash flows incur. The amounts resulted from change of exchange rate are presented
separately in the cash flow statement.
10. Financial assets and financial liabilities
The company shall recognize a financial asset or a financial liability when the company becomes
party to the contractual provisions of the instrument.
(1) Financial assets
1) Classification, recognition and measurement
The company shall classify financial assets as measured at amortized cost, fair value through other
comprehensive income or fair value through profit or loss on the basis of both the company’s
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business model for managing the financial assets and the contractual cash flow characteristics of the
financial asset.
A financial asset shall be measured at amortized cost if both of the following conditions are met: ①
the financial asset is held within a business model whose objective is to hold financial assets in order
to collect contractual cash flows;②the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding. At initial recognition, the company shall measure the financial asset at its fair value and
take any transaction costs that are directly attributable to the financial asset into account. After initial
recognition, the company shall measure the financial asset at amortized cost. A gain or loss on a
financial asset that is measured at amortized cost and is not a hedged item shall be recognized in
profit or loss when the financial asset is derecognized, impaired, involved in foreign exchange or
amortized for any difference arising between the initial recognized amount and due amount by
applying effective interest method.
A financial asset shall be measured at fair value through other comprehensive income if both of the
following conditions are met: ①the financial asset is held within a business model whose objective
is achieved by both collecting contractual cash flows and selling financial assets and ②the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding. At initial recognition, the
company shall measure this financial asset at its fair value and take any transaction costs that are
directly attributable to the financial asset into account. A gain or loss on a financial asset that is
measured at fair value through other comprehensive income and is not a hedged item shall be
recognized in other comprehensive income apart from a gain or loss on credit loss, foreign exchange
and interest of the financial asset calculated by effective interest method. Accumulated gain or loss
previously in the other comprehensive income shall be out of it and accounted in the profit or loss
account when the financial asset is derecognized.
The company recognized interest revenue based on effective interest method. Interest revenue shall
be calculated by applying the effective interest rate to the gross carrying amount of a financial asset,
except for: ①purchased or originated credit-impaired financial assets. For those financial assets, the
company shall apply the credit-adjusted effective interest rate to the amortized cost of the financial
asset from initial recognition. ②financial assets that are not purchased or originated credit-impaired
financial assets but subsequently have become credit-impaired financial assets. For those financial
assets, the company shall apply the effective interest rate to the amortized cost of the financial asset
in subsequent reporting periods.
The company designates an investment as fair value measured through other comprehensive income
if an equity instrument held is not for trading. Once the decision is made, it is an irrevocable election.
At initial recognition, the company shall measure the equity instrument investment not for trading at
its fair value and take any transaction costs that are directly attributable to the financial asset into
account. Any other gain or loss (including foreign exchange gain or loss) shall be accounted in other
comprehensive income and shall not be subsequently transferred to profit or loss, unless the dividend
received is accounted in profit or loss (excluding the recovered investment cost). Accumulated gain
or loss previously in the other comprehensive income shall be out of it and into retained earnings
when the financial asset is derecognized.
Apart from classified as the amortized cost financial assets and as fair value through other
comprehensive income financial assets, a financial asset is classified as fair value through profit or
loss. At initial recognition, the company shall measure this financial asset at its fair value and take
any transaction costs that are directly attributable to the financial asset into account.
A financial asset shall be classified as fair value through profit or loss if it is recognized contingent
consideration through business combination, which is not under same control situation.
2) Recognition and measurement of transfer of financial assets
A financial asset is derecognized when any one of the following conditions is satisfied: ①the rights
to receive cash flows from the asset is terminated, ②the financial asset has been transferred and the
company transfers substantially all risks and rewards relating to the financial assets to the
transferee, ③the financial asset has been transferred to the transferee, the company has given up its
control of the financial asset although the company neither transfers nor retains all risks and rewards
of the financial asset.
In the case where the financial asset as a whole qualifies for the derecognition conditions, the
difference between the carrying value of transferred financial asset and the sum of the consideration
received for transfer and the accumulated amount of changes in fair value in respect of the amount of
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partial derecognition (the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding) , that
was previously recorded under other comprehensive income is transferred into profit or loss for the
period.
In the case where only part of the financial asset qualifies for derecognition, the carrying amount of
financial asset being transferred is allocated between the portions that to be derecognised and the
portion that continued to be recognised according to their relative fair value. The difference between
the amount of consideration received for the transfer and the accumulated amount of changes in fair
value that was previously recorded in other comprehensive income for the asset partially qualified
for derecognition (the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding) and the
above-mentioned allocated carrying amount is charged to profit or loss for the period.
(2) Financial liabilities
1) Classification, basis for recognition and measurement
Financial liabilities of the company are classified at initial recognition as “financial liabilities at fair
value through profit or loss” and “other financial liabilities” on initial recognition.
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and those designated as fair value through profit or loss on initial recognition. They are subsequently
measured at fair value. The net gain or loss arising from changes in fair value, dividends and interest
paid related to such financial liabilities are recorded in profit or loss for the period in which they are
incurred.
Other financial liabilities shall be subsequently measured at amortized cost by applying effective
interest method. The company shall classify a financial liability as a liability measured at amortized
cost except the followings: ①financial liability measured at fair value through profit or loss
including tradable financial liability (derivative instrument of financial liability included) and
designated as financial liability measured at fair value through profit or loss ② financial assets
transfers that do not qualify for derecognition or financial liability is formed from continuing
involvement in transferred assets ③ financial guarantee contract not in the above category of ①or
② and loan commitment which is not in the category ① at the below the market loan rate.
The company shall account the financial liability as it measured at fair value through profit or loss if
the financial liability is formed by contingent consideration recognized by the buyer through
business combination that is not under common control.
2) Financial liability derecognition
A financial liability is derecognized when the underlying present obligations or part of it are
discharged. Existing financial liability shall be derecognized and new financial liability shall be
recognized when the company signs the agreement with creditor to undertake the new financial
liability in replacement of existing financial liability, and the terms of agreement are different in
substance. Any significant amendment to the agreement as a whole or part o it is made, then the
existing liabilities or part of it shall be derecognized and financial liability after terms amendment
shall be recognized as a new financial liability. The difference between the carrying amount of the
financial liability derecognized and the consideration paid is recognized in profit or loss for the
period.
(3) Fair value measurement of financial asset and financial liability
The company uses the price in the primary market for financial assets and liability fair value
measurement, if no primary market exists, the price in the most advantageous market shall be used
for fair value measurement and applicable valuation techniques which enough data is available for
and supported by other information shall be adopted. Input for fair value measurement has 3 levels:
level 1 input is the unadjusted quoted price for identical asset or liability available at the active
market on the measurement date; level 2 input is the directly or indirectly observable input for
relevant asset or liability apart from level 1 input; level 3 input is the unobservable input for relevant
asset or liability.
(4) Financial asset and financial liability offset
Financial asset and financial liability shall be presented in the balance sheet separately and cannot be
offset, unless the following conditions are all met: ①the company has the legal right to recognized
offset amount and the right is enforceable. ②the company plans to receive or a legal obligation to
pay cash at net amount.
(5) Distinguishment between financial liability and equity instrument and accounting
Financial liability and equity instrument shall be distinguished in accordance with the following
standards: ① if the company cannot unconditionally avoid paying cash or financial asset to fulfil a
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contractual obligation, the contractual obligation is qualified or financial liability. For certain
financial instrument, although there are no clear terms and conditions to include obligation of paying
cash or other financial liability, contractual obligation may indirectly be formed through other terms
and conditions. ② the company’s own equity instrument shall also be considered whether it is the
substitute of cash, financial asset or it is the remaining equity, after the issuer deducts liability,
enjoyed by the equity holder , if it must or can be used to settle a financial asset. If the former, the
instrument is a financial liability of the issuer, otherwise it is an equity instrument of the issuer. In
certain circumstances, financial instrument contract is classified as financial liability, if financial
instrument contract specifies the company must or can use its own equity to settle the financial
instrument, the contractual amount of right or obligation equals to that of the numbers of own equity
instrument available or to be paid multiplied by fair value when settling, nevertheless the amount
is fixed, or varied partially or fully based on the its own equity’s market price(such as interest rate,
certain commodity’s or financial instrument’s price variance).
When classifying a financial instrument (or its component) in the consolidated statements, the
company takes all terms and conditions agreed by the group member and instrument holder into
consideration. If the group due to the instrument, as a whole, bears settlement obligation by paying
cash, other financial asset or other means resulted in financial liability, the instrument shall be
classified as financial liability.
If a financial instrument or its component is financial liability, any gain or loss, interest, dividend,
and any gain or loss from buy back or refinancing shall be accounted in profit or loss.
If a financial instrument or its component is an equity instrument, when it was issued (including
refinancing), bought back, sold or withdrawn, any change shall be regarded as equity change and no
fair value change shall be recognized.
(6) Financial asset impairment
Based on expected credit loss, a financial asset measured at amortized cost, a debt instrument
investment measured at FVTOCI and a contractual asset shall all be subject to impairment
accounting and be recognized for impairment loss allowance if any impairment.
Expected credit loss is the weighted average of credit losses with the respective risks of a default
occurring as the weights. A credit loss herein is referred to as the present value, at original effective
rate, of the difference between the contractual cash flows that are due to the company under the
contract; and the cash flows that the company expects to receive, that's the present value of the total
cash shortage. A financial asset shall be the present value, at credit adjusted effective rate, if it is a
purchased or originated credit -impaired asset.
The company adopts simplified approach for trade receivables, contract assets that do not contain a
significant financing component, and shall always measure the loss allowance at an amount equal to
lifetime expected credit losses.
Impairment requirements is to assess whether credit risk has been significantly increased since initial
recognition at each reporting date, if there have been significant increases in credit risk, the company
shall measure the loss allowance for a financial instrument at an amount equal to the lifetime
expected credit losses, at the reporting date, if the credit risk on a financial instrument has not
increased significantly since initial recognition, the company shall measure the loss allowance for
that financial instrument at an amount equal to 12month expected credit losses.
When assessing expected credit losses, the company considers all reasonable and supportable
information, including that which is forward-looking.
The company shall measure expected credit losses of a financial instrument in a way that reflects: an
unbiased and probabilityweighted amount that is determined by evaluating a range of possible
outcomes; The time value of money; and reasonable and supportable information that is available
without undue cost or effort at the reporting date about past events, current conditions and forecasts
of future economic conditions.
The company directly lowers the book value of the financial asset when contractual cash flow cannot
be fully or partially recollected within rational expectation any longer.
The company also assesses the expected credit loss of financial asset measured at amortized cost
based on aging portfolio, other than past due credit loss assessment based on individual item.
11. Provision for Impairment of Trade receivables
The company’s receivables include notes receivable, receivable, other receivable, and recognition
and accounting of receivable expected credit loss as well.
（1） Recognition of provision for impairment
On the basis of expected credit loss, the company always measures the loss allowance at an amount
equal to lifetime expected credit losses for trade receivables which do not contain a significant
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financing component and are generated in accordance with Revenue Standard- No 14 of Accounting
Standard for Business Enterprise. For trade receivables which do contain a significant financing
component, the company chooses as its accounting policy to measure the loss allowance at an
amount equal to lifetime expected credit losses.
（2） Expected credit loss risk portfolio assessment method based on portfolio
The company separately assesses the credit risk of financial assets which have significantly different
the credit risk, such as receivable with dispute or involved in litigation and arbitration; There are
clear signs indicating the debtor is unlikely to fulfill the repayment obligations of the receivables or
the receivables with significantly different credit risk due to contacted repayment etc.
Apart from the financial asset to be assessed for credit risk separately, the company divides the
financial assets into different group based on common characteristics of risk and assesses the risk
based on the portfolio.
①Notes receivable
Based on the acceptor credit risk of notes receivable as the common risk characteristics, it is divided
into different categories and determined for expected credit loss accounting estimate policy.
Portfolio category Expected credit loss accounting estimate policy
Bank acceptance note portfolio Lower credit risk assessed by the management
Same as receivables and provided for excepted credit loss
Commercial acceptance note portfolio
allowance
②Trade receivables and other receivables
Apart from the trade receivables and other receivables to be assessed for credit risk separately, based
on the counterparty as the common risk characteristics, it is divided into different categories and
determined for expected credit loss accounting estimate policy.
Portfolio category Expected credit loss accounting estimate policy
Related parties portfolio within the
Lower credit risk assessed by the management
consolidation
Other related parties and non-related Same as receivables and provided for excepted credit loss
parties portfolio allowance
The company prepares the comparison table between receivables aging and expected credit loss rate
within lifetime and work out the expected credit loss by reference to historical credit loss experience
in combination with current situation and future forecast of economy condition.
The company shall measure expected credit losses of a financial instrument in a way that reflects: an
unbiased and probabilityweighted amount that is determined by evaluating a range of possible
outcomes; The time value of money; and reasonable and supportable information that is available
without undue cost or effort at the reporting date about past events, current conditions and forecasts
of future economic conditions.
The company prepares the comparison table between receivables aging and fixed provision rate and
work out the expected credit loss by reference to historical credit loss experience.
On the balance sheet date, expected credit loss of receivable shall be calculated. If the expected
credit loss is larger than the book value of the provision of receivable impairment, the difference
shall be recognized as receivable impairment loss, debit to “credit impairment loss”, credit to
“provision for bad debt”. Alternatively, the difference is recognized as impairment gain and reversed
journal entry shall be made.
Actually incurred credit loss shall be debit to “provision for bad debt”, credit to “notes receivable”,
“receivable”, “other receivable” based on the approved amount to be written off as it is assured as
uncollectible receivable. If the amount to be written off is bigger than the provision for impairment
loss, the difference is debit to “credit impairment loss”
12. Financing receivable
During the liquidity management of the company, majority of the bill receivables is endorsed or
discounted prior to the bill due date and endorsed or discounted bill receivables are derecognized
after the all risks and rewards have been transferred to the counter party. The business model for
managing bill receivables is not only for collecting contractual cash flows but also for selling the
financial assets as its objective, therefore it is classified as financial assets that are measured at fair
value through other comprehensive income
13. Inventories
Inventories are materials purchasing, raw material, variance of cost materials, low-valuable
consumable, materials processed on commission, working-in-progress, semi-finished goods,
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variance of semi-finished goods, and finished goods, engineering construction and costs to fulfill a
contract etc.
The inventories are processed on perpetual inventory system, and are measured at their actual cost
on acquisition. Weighted average cost method is taken for measuring the inventory dispatched or
used. Low value consumables and packaging materials is recognized in the income statement by
one-off method.
After year-end thorough inventory check, at the balance sheet date inventory impairment should be
provided or adjusted according to inventory category. For the finished goods, raw material held for
sale and work-in-progress etc which shall be sold directly, the net realizable value should be
confirmed at the estimated selling price less estimated selling expenses and related tax and expenses.
The raw material held for production, its realizable value should be confirmed at the estimated
selling price of finished goods less estimated cost of completion, estimated selling expenses and
related tax.
14. Contract asset
(1) Recognition and criterion
Contract asset is an entity’s right to consideration in exchange for goods or services that the entity
has transferred to a customer when that right is conditioned on something other than the passage of
time. For example, the company sold two goods that can be clearly distinguished to the client, then
the company has the right to consideration in exchange of the goods because one of the goods are
delivered, but the consideration’s collection is conditioned on the other goods delivery, in this case,
the right to consideration shall be recognized as contract asset.
(2) Expected credit loss recognition and accounting of contract asset
Expected credit loss recognition of contract asset is referred to the Note XI. Provision for
Impairment of Trade receivables.
On the balance sheet date, expected credit loss of contract asset shall be calculated and the difference
shall be recognized as the impairment loss if the loss figure worked out is bigger than the carrying
amount of the provision for impairment of contract asset, and debit “asset impairment loss”, credit
“provision for impairment of contract asset”. On the contrary, the Company shall recognize the
difference as impairment profit and keep the opposite accounting record.
If the actual credit loss incurred and the contract asset is unable to be collected with confirmation,
after the approval is given, the loss shall be written off based on the approved amount and debit
“provision for impairment of contract asset”, credit “contract asset”. If the amount to be written is
greater than the provision, the difference shall be debited to “asset impairment loss”.
15. Contract cost
(1) Assets recognition methods in relation to contract cost
Assets relevant to contract cost in the company include cost to fulfill the contract and cost to obtain a
contract.
If the costs incurred in fulfilling a contract with a customer are not within the scope of another
Standard, an entity shall recognize an asset from the costs incurred to fulfill a contract only if those
costs meet all of the following criteria: the costs relate directly to a contract or to an anticipated
contract, including direct labor, direct materials and overheads which is clearly stated to be borne by
the client and any other cost in line with the contract; the costs enhance resources of the entity that
will be used in performance obligations in the future; and the costs are expected to be recovered.
An entity shall recognize an asset as the incremental costs of obtaining a contract with a customer if
the entity expects to recover those costs. an entity may recognize the incremental costs of obtaining a
contract as an expense when incurred if the amortization period of the asset t is one year or less. The
incremental costs of obtaining a contract are those costs that an entity incurs to obtain a contract with
a customer that it would not have incurred if the contract had not been obtained (for example, a sales
commission). Costs to obtain a contract that would have been incurred rather than the incremental
cost expected to be recovered shall be recognized as an expense when incurred, unless those costs
are explicitly chargeable to the customer regardless of whether the contract is obtained
(2) Amortization of asset relevant to contract cost
An asset recognized in accordance with contract cost shall be amortized on a systematic basis that is
consistent with the transfer to the customer of the goods or services to which the asset relates.
(3) Impairment of asset relevant to contract cost
When determining the impairment loss of the assets related to the contract cost, the Company shall
firstly determine the impairment loss of the assets related to the contract that are recognized in
accordance with the other accounting standards. If the book value of the asset is higher than the
remaining consideration expected to be obtained by the Company for the transfer of the goods
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related to the asset and the estimated cost to be incurred for the transfer of the goods related to the
asset, the excess part shall be withdrawn as an impairment provision and recognized as an
impairment loss of the asset.
An entity shall recognize in profit or loss a reversal of some or all of an impairment loss previously
recognized when the impairment conditions no longer exist or have improved. The increased
carrying amount of the asset shall not exceed the amount that would have been determined (net of
amortization) if no impairment loss had been recognized previously.
16. Long-term equity investment
Long term equity investments are the investment in subsidiary, in associated company and in joint
venture.
Joint control is the contractual agreement sharing of control over an economic activity by all
participants or participants’ combination and decisions or policies relating to the operating activity of
the entity require the unanimous consent of the parties sharing the control.
Significant influence exists when the entity directly or indirectly owned 20% or more but less than
50% shares with voting rights in the investee company. If holding less than 20% voting rights, the
entity shall also take other facts or circumstances into accounts when judging any significant
influences. Factors and circumstances include: representation on the board of directors or equivalent
governing body of the investee, participation in financial or operating activities policy-making
processes, material transactions between the investor and the investee, interchange of managerial
personnel or provision of essential technical information.
When control exists over an investee, the investee is a subsidiary of an entity. The initial investment
cost for long-term equity investment acquired through business combination under common control,
is the carrying amount presented in the consolidated financial statements of the share of net assets at
the combination date in the acquired company. If the carrying amount of net assets at the
combination date in the acquired company is negative, investment shall be recognized at zero.
If the equity of investee under common control is acquired by stages and business combination
incurs in the end, an entity shall disclose the accounting method for long-term equity investment in
the parent financial statement as a supplemental. For example, if the equity of investee under
common control is acquired by stages and business combination incurs in the end, and it’s a bundled
transaction, the entity shall regard all transactions as a one for accounting. If it’s not a bundled
transaction, the carrying amount presented in the consolidated financial statements of the share of
net assets at the combination date in the acquired company since acquisition is determined as for the
initial cost of long-term equity investment. The difference between the cost initially recognized and
carrying amount of long-term equity investment prior to the business combination plus the newly
paid consideration for further share acquired, and capital reserve shall be adjusted accordingly. If no
enough capital reserve is available for adjustment, retain earnings shall be adjusted.
If long-term equity investment is acquired through business combination not under common control,
initial investment cost shall be the combination cost.
If the equity of investee not under common control is acquired by stages and business combination
incursion the end, an entity shall disclose the accounting method for long-term equity investment in
the parent financial statement as a supplemental. If the equity investment of investee not under
common control is acquired by stages and business combination incursion the end, and it’s a bundled
transaction, the entity shall regard all transactions as a one for accounting. If it’s not a bundled
transaction, the carrying amount of the equity investment held previously plus newly increased
investment cost are taken as the initial investment cost under cost model. If equity investment is held
under equity method before the acquisition date, other comprehensive income under equity method
previously shall not be adjusted accordingly. When disposing of the investment, the entity shall
adopt the same basis as the investee directly disposing of related assets or liability for accounting
treatment. Prior to acquisition date, if the equity is designated as measured at FV through other
comprehensive income financial assets, accumulated change on fair value previously recorded in
other comprehensive shall be transferred into retained earnings. If the financial assets are FV through
P&L, previously recorded in gain or loss on FV change do not need to be transferred to investment
income. Other equity instrument held prior to acquisition date, accumulative gain or loss on FV
change previously recorded in comprehensive income statement shall be transferred to retained
earnings.
Apart from the long-term equity investments acquired through business combination mentioned
above, the cost of investment for the long-term equity investments acquired by cash payment is the
amount of cash paid. For long-term equity investment acquired by issuing equity instruments, the
cost of investment is the fair value of the equity instrument issued. For long-term equity investment
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injected to the entity by the investor, the investment cost is the consideration as specified in the
relevant contract or agreement.
The Company adopts cost method to account for investment in subsidiary and equity method for
investment in joint venture and affiliate.
Long-term equity investment subsequently measured under cost model shall increase the carrying
amount of investment by adjusting the fair value of additional investment and relevant transaction
expenses. Cash dividend or profit declared by investee shall be recognized as investment gain/loss
for the period based on the proportion share in the investee.
Long-term equity investment subsequently measured under equity method shall be adjusted for its
carrying amount according to the share of equity increase or decrease in the investee. The entity shall
recognize its share of the investee’s net profits or losses based on the fair value of the investee’s
individual identifiable assets at the acquisition date, after making appropriate adjustments thereto in
conformity with the accounting policies and accounting period, and offsetting the unrealized profit
or loss from internal transactions entered into between the entity and its associates and joint ventures
according to the shareholding attributable to the entity and accounted for as investment income and
loss based on such basis.
On disposal of a long-term equity investment, the difference between the carrying value and the
consideration actually received is recognized as investment income for the period. For long-term
investments accounted under equity method, other comprehensive income recorded shall be
accounted on the same basis as the investee directly disposing of related assets or liability when
equity method is not used any longer. The movements of shareholder’s equity, other than the net
profit or loss, other comprehensive income and profit distribution previously recorded in the
shareholder’s equity of the Company are recycled to investment income for the period on disposal.
Where the entity has no longer joint control or significant influence in the investee company as a
result of partially disposal of the investment, the remaining investment will be accounted for in line
with the recognition and measurement of financial instruments, and the difference between the fair
value of remaining investment at the date of losing joint control or significant influence and its
carrying amount shall be recognized in the profit or loss for the year. Other comprehensive income
recognized from previous equity investment under equity model shall be accounted for and carried
over on the same basis as the investee directly disposing of related assets or liability when stopping
using under equity model. The movements of shareholder’s equity, other than the net profit or loss,
other comprehensive income and profit distribution previously recorded in the shareholder’s equity
of the Company are recycled to investment income for the period on disposal.
Where the entity has no longer control over the investee company as a result of partially disposal of
the investment, the remaining investment will be changed to be accounted for using equity method
providing remaining joint control or significant influence over the investee company. The difference
between carrying amount of disposed investment and consideration received actually shall be
recognized in the profit and loss for the period as investment gain or loss, and investment shall be
adjusted accordingly as if it was accounted for under equity model since acquisition. Where the
entity has on longer joint control or significant influence in the investee as a result of disposal, the
investment shall be changed to be accounted for as available for sale financial assets, and difference
between the carrying amount and disposal consideration shall be recognized in profit and loss for the
period, and the difference between the fair value of remaining investment at the date of losing
control and its carrying amount shall be recognized in the profit or loss for the year as investment
gain or loss.
If the entity loses its control through partially disposal of investment by stages and it’s not a bundled
transaction, the entity shall account for all transactions separately. If it’s a bundled transaction, the
entity shall regard all transactions as one disposal of subsidiary by losing control, but the difference
between disposal consideration and carrying amount of the equity investment disposed prior to
losing control, which arises from each individual transaction shall be recognized as other
comprehensive income until being transferred into profit and loss for the period by the time of losing
control.
17. Investment property
The investment property includes property and building and measured at cost model
Estimated net
Useful life
Category residual value rate Annual depreciation rate
(years)
(%)
Housing and Buildings 40 3% 2.43%
18. Fixed assets
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Recognition criteria of fixed assets: defined as the tangible assets which are held for the purpose of
producing goods, rendering services, leasing or for operation & management, and have more than
one year of useful life.
Fixed assets shall be recognized when the economic benefit probably flows into the Group and its
cost can be measured reliably. Fixed assets include: building, machinery, transportation equipment,
electronic equipment and others.
All fixed assets shall be depreciated unless the fixed assets had been fully depreciated and are still
being used and land is separately measured. Straight-line depreciation method is adopted by the
Group. Estimated net residual value rate, useful life, depreciation rate as follows:
Useful life Estimated net residual Annual
No Category
(years) value rate (%) depreciation rate
1 Housing and Buildings 20-40 3%,5%,10% 2.25-4.85%
2 Machinery equipment 10-22 3%,5%,10% 4.09-9.7%
3 Transportation equipment 4-15 3%,5%,10% 6-24.25%
4 Electronic equipment 5 3%,5%,10% 18-19.4%
5 Others equipment 10-15 3%,5%,10% 6-9.7%
The Group should review the estimated useful life, estimated net residual value and depreciation
method at the end of each year. If any change has occurred, it shall be regarded as a change in the
accounting estimates.
Finance leased FA, on commencement date, leased asset shall be recognized at the lower of fair
value and the PV of minimum lease payment, and the difference between the asset book value on the
first day and the minimum lease payment is unrecognized financing expense.
The depreciation policy of the leased fixed assets shall be consistent with that of the self-owned
fixed assets. If the ownership of asset can be reliably acquired by the lease term due date, leased
asset shall be depreciated through the expected service life, otherwise, it shall be depreciated within
the lower of the lease term and expected service life of the asset.
19. Construction in progress
Constructions in progress are carried down to fixed assets based on the construction budget and
actual costs on the date when completing and achieving estimated usable status, and the fixed assets
should be withdrawn deprecation in the next month. Adjustment will be conducted upon
confirmation of their actual values after implementing the completion and settlement procedures.
20. Borrowing costs
The borrowing costs incurred which can be directly attribute to the fixed assets, investments
properties, inventories requesting over 1 year purchasing or manufacturing so to come into the
expected condition of use or available for sale shall start to be capitalized when expenditure for the
assets is being occurred, borrowing cost has occurred, necessary construction for bringing the assets
into expected condition for use is in progress. The borrowing costs shall stop to be capitalized when
the assets come into the expected condition of use or available for sale. The borrowing costs
subsequently incurred should be recorded into profit and loss when occurred. The borrowing costs
should temporarily stop being capitalized when there is an unusual stoppage of over consecutive 3
months during the purchase or produce of the capitalized assets, until the purchase or produce of the
asset restart.
The borrowing costs of special borrowings, deducting the interest revenue of unused borrowings
kept in the bank or the investment income from transient investment should be capitalized. The
capitalized amount of common borrowings should be calculated as follows: average assets
expenditure of the accumulated assets expenditure excesses the special borrowing, multiplied by the
capital rate. The capital rate is the weighted average rate of the common borrowings.
21. Intangible assets
The intangible assets of the Group refer to land use right and software, patent, non-patented
technology and other intangible asset should be measured at actual costs. For acquired intangible
assets, the actual costs are measured at actual price paid and relevant other expenses. The cost
invested into intangible assets by investors shall be determined according to the stated value in the
investment contract or agreement, except for those of unfair value in the contract or agreement,
which the actual costs should be determined by the fair value.
Land use right shall be amortized evenly within the amortization period since the remised date.ERP
system software and other intangible assets are amortized over the shortest of their estimated useful
life, contractual beneficial period and useful life specified in the law. Amortization charge is
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included in the cost of assets or expenses, as appropriate, for the period according to the usage of the
assets. At the end of the year, for definite life of intangible assets, their estimated useful life and
amortization method shall be assessed. Any change shall be treated as change on accounting
estimate.
22. Impairment of long-term assets
The Group assesses at each balance sheet date whether there is any indication that long-term equity
investments, investment property, fixed assets, construction in progress and intangible assets with
definite useful life may be impaired. If there is any indication that an asset may be impaired, the
asset will be tested for impairment. Goodwill and intangible asset with infinite useful life are tested
for impairment annually no matter there is any indication of impairment or not.
Estimate of recoverable amount is the higher of its fair value less costs to sell and the present value
of the future cash flows expected to be derived from the asset.
If the recoverable amount of an asset is less than its carrying amount, the carrying amount shall be
impaired and the difference is recognized as an impairment loss and charged to profit or loss for the
period. Once an impairment loss on the assets is recognized, it is not reversed in a subsequent period.
After assets impairment loss is recognized, depreciation and amortization of the impaired asset shall
be adjusted in the following period so that the adjusted carrying amount (less expected residual value)
can be depreciated and amortized systematically within the remaining life.
Goodwill arising in a business combination and intangible asset with infinite useful life are tested for
impairment annually no matter there is any indication of impairment or not.
When assessing goodwill for impairment, the carrying amount of goodwill shall be allocated evenly
to the assets group or assets portfolio. When testing the assets group or assets portfolio including
goodwill, if there is any indication of impairment , ignoring the goodwill and testing the assets
group or assets portfolio alone so to work out the recoverable amount and comparing to its carrying
amount and recognize the impairment loss. After that, testing the assets group or assets portfolio
with goodwill together, comparing the carrying amount of the assets group or assets portfolio
(including goodwill allocation) with recoverable amount, goodwill impairment shall be recognized
when the recoverable amount is lower than its carrying amount.
23. Long-term deferred expenses
Long-term deferred expenses of the Group refer to leasing expenses, redecoration expense and
others. The expenses should be amortized evenly over the beneficial period. If the deferred expense
cannot take benefit for the future accounting period, the unamortized balance of the deferred
expenses should be transferred into the current profit or loss. The amortization period should be
determined by the contract. If the contract without the amortization period specification, leasing
expenses will be amortized within 10 years and 30years; redecoration expense and others will be
amortized within 3 years.
24. Contract liability
An entity’s obligation to transfer goods or services to a customer for which the entity has received
consideration (or the amount is due) from the customer. If a customer pays consideration, or an
entity has a right to an amount of consideration that is unconditional before the entity transfers a
good or service to the customer, the entity shall present the contract as a contract liability when the
payment is made or the payment is due (whichever is earlier).
25. Employee benefits
Employee’s benefit comprises short-term benefit, post-employment benefit, termination benefit and
other long-term employee’s benefit.
Short-term benefit includes salary, bonus, allowance, welfare, social insurance, housing funds, labor
union expense, staff training expense, during the period in which the service rendered by the
employees, the actually incurred short term employee benefits shall be recognized as liability and
shall be recognized in P&L or related cost of assets based on benefit objective allocated from the
service rendered by employees.
Post-employment benefits include the basic pension scheme and unemployment insurance etc. Based
on the risk and obligation borne by the Group, post-employment benefits are classified into defined
contribution plan and defined benefit plan. For defined contribution plan, liability shall be
recognized based on the contributed amount made by the Group to separate entity at the balance
sheet date in exchange of employee service for the period and it shall be recorded into current profit
and loss account or relevant cost of assets in accordance with beneficial objective.
Termination benefits are employee’s benefit payable as a result of either an entity’s decision to
terminate an employee’s employment before the contract due date or an employee’s decision to
accept voluntary redundancy in exchange for those benefits. An entity shall recognize the
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termination benefits as a liability and an expense at the earlier date when the entity cannot unilateral
withdraw the termination benefits due to employment termination plan or due to redundancy
suggestion, or when the entity can recognize the restructuring cost or expense arising from paying
termination benefits.
Other long-term employee’s benefit refers to all other employee benefits other than short-term
benefit, post-employment benefit and termination benefit.
If other long-term employee’s benefit is qualified as defined contribution plan, contribution made
shall be recognized as liabilities accordingly for the period in which the service are rendered by the
employee and recognized in the profit or loss for the current period or relevant cost of assets. Except
other long-term employee’s benefit mentioned above, obligation arising from defined benefit plan
shall be recognized in the profit or loss for the current period or relevant cost of assets in accordance
with the period when the service are rendered by the employee.
26. Provision
When the company has transactions such as commitment to externals, discounting the trade
acceptance, unsettled litigation or arbitration which meets the following criterion, provision should
be recognized: It is the Company's present obligation; carrying out the obligation will probably cause
the Company's economic benefit outflow; the obligation can be reliably measured.
Provision is originally measured on the best estimate of outflow for paying off the present
obligations.
When determining the best estimate, need to consider the risk, uncertainty, time value of monetary
relevant to contingent items. If the time value of monetary is significant, the best estimate will be
determined by discounted cash outflow in the future.
When compensation from the 3rd party is expected for full or partial contingent liability settlement,
the compensation shall be recognized as an asset separately and measured at no more than the book
value of contingent liability.
27. Share based payment
An equity-settled share-based payment in exchange for the employee’s services is measured at the
fair value at the date when the equity instruments are granted to the employee. Such fair value during
the vesting period of service or before the prescribed exercisable conditions are achieved is
recognized as relevant cost or expense on a straight-line during the vesting period based on the best
estimated quantity of exercisable equity instruments, accordingly increase capital reserve.
A cash-settled share-based payment is measured at the fair value at the date at which the Group
incurred liabilities that are determined based on the price of the shares or other equity instruments. If
it is immediately vested, the fair value of the liabilities at the date of grant is recognized as relevant
cost or expense, and corresponding liabilities. If it is exercisable only when the vesting period of
service is expired or the prescribed conditions are achieved, the fair value of liabilities undertaken by
the Group are re-measured at each balance sheet date based on the best estimate of exercisable
situation. According to the fair value which the Group incurred liabilities, and recognizing acquired
services as costs or expenses, and adjust liabilities accordingly.
The fair value of the liabilities is re-measured at each balance sheet date. Any changes are
recognized in the profit or loss for the year.
If the granted equity instruments are cancelled within the vesting period (apart from the situation
where the vesting condition is not satisfied), the equity instrument shall be treated as accelerated
vesting and regarded as all share based payment plan satisfying vesting condition, and all expense
during the remaining vesting period shall be accounted at the same period when the granted equity
instruments are cancelled.
28. Principle of recognition and measurement of revenue
Accounting policy
The revenue of the company is mainly from selling goods, providing engineering installation
services.
The company shall recognize revenue when (or as) the company satisfies a performance obligation
by transferring a promised good or service to a customer. An asset is transferred when (or as) the
customer obtains control of that asset.
If the contract includes two or more performance obligations, at the inception date of contract, the
company shall allocate the transaction price to each performance obligation identified in the contract
on a relative standalone selling price ratio basis and measure the revenue at the allocated transaction
price to each performance.
The transaction price is the amount of consideration to which the company expects to be entitled in
exchange for transferring promised goods or services to a customer, excluding amounts collected on
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behalf of third parties. The determined transaction price shall be limited to the extent where the
maximum reversal amount of revenue recognized with the least possibility once the uncertainty
related to the variable consideration is removed. The company shall recognize a refund liability if the
entity receives consideration from a customer and expects to refund some or all of that consideration
to the customer. Where a significant financing component exists in the contract, the transaction price
shall be measured at the assumed price that the payment is made by cash as the client receive the
control right of goods or services. The difference between the promised consideration and the cash
selling price shall be amortized within the contract period at effective interest rate. The company
need not take the financing component into the consideration if the entity expects, at contract
inception, that the period between when the entity transfers a promised good or service to a customer
and when the customer pays for that good or service will be one year or less.
When the company transfers control of a good or service over time, it satisfies a performance
obligation and recognizes revenue over time only if one of the following criteria is met, otherwise it
shall be the performance obligation at a point in time.
(1) the customer simultaneously receives and consumes the benefits provided by the entity’s
performance as the entity performs
(2) the company’s performance creates or enhances an asset (for example, work in progress) that
the customer controls as the asset is created or enhanced
(3) the entity’s performance does not create an asset with an alternative use to the entity and the
entity has an enforceable right to payment for performance completed to date
If it is performance obligation over time, the company shall recognize the revenue in accordance
with the progress of performance obligation and measure the progress based on input method. In the
circumstances, the company may not be able to reasonably measure the progress of a performance
obligation, but the company expects to recover the costs incurred in satisfying the performance
obligation. In those circumstances, the entity shall recognize revenue only to the extent of the costs
incurred until such time that it can reasonably measure the progress of the performance obligation.
It satisfies a performance obligation at a point in time when the control right of goods or services are
received by the client, and revenue shall be recognized. Judging whether the client has received the
control right, the following indicators shall be considered:
(1) The entity has a present right to payment for the asset
(2) The legal title to the asset has been transferred to the customer
(3) The company has transferred physical possession of the asset to the client
(4) The company has transferred the significant risks and rewards of ownership of an asset to
the customer
(5) The customer has accepted the goods or service
The right of receiving the consideration the company entitled to, as the goods or service have been
transferred, shall be listed as contract asset and impairment provision shall be based on the expected
credit loss. Unconditioned right of receiving the consideration shall be listed as receivable. The
obligation shall be listed as contract liability where the company has received consideration, but
services or goods not transferred to the customer.
.29. Government grants
A government grant shall be recognized when the company complies with the conditions attaching to
the grant and when the company is able to receive the grant.
Assets-related government grant is the government fund obtained by the company for the purpose of
long-term assets purchase and construction or establishment in the other forms. Income-related
grants are the grant given by the government apart from the assets-related grants. If no grant
objective indicated clearly in the government documents, the company shall judge it according to the
principle mentioned above.
Where a government grant is in the form of a transfer of monetary asset, it is measured at the amount
received. Where a government grant is made on the basis of fixed amount or conclusive evidence
indicates relevant conditions for financial support are met and expect to probably receive the fund, it
is measured at the amount receivable. Where a government grant is in the form of a transfer of
non-monetary asset, it is measured at fair value. If fair value cannot be determined reliably, it is
measured at a nominal amount of RMB1 Yuan.
Assets-related government grants are recognized as deferred income or directly offsetting the book
value of the asset, and Assets-related government grants recognized as deferred income shall be
evenly amortized to profit or loss over the useful life of the related asset.
Any assets are sold, transferred, disposed off or impaired earlier than their useful life expired date,
the remaining balance of deferred income which hasn’t been allocated shall be carried forward to the
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income statement when the assets are disposed off.
Income-related government grants that is a compensation for related expenses or losses to be
incurred in subsequent periods are recognized as deferred income and credited to the relevant period
when the related expenses are incurred. Government grants relating to compensation for related
expenses or losses already incurred are charged directly to the profit or loss for the period.
Government grants related to daily business, shall be recognized as other income in accordance with
business nature or offsetting related expenses, otherwise, shall be recognized as non-operating
income or expenses.
If any government grant already recognized needs to be returned to the government, the accounting
shall be differed according to the following circumstances:
1) originally recognized as offsetting of related assets' book value, assets book value shall be
adjusted,
2) if any deferred income, book value of deferred income shall be offset, excessive portion
shall be accounted into income statement,
3) Other situation, it shall be accounted into income statement directly.
30. Deferred tax assets and deferred tax liabilities
The deferred income tax assets or the deferred income tax liabilities should be recognized according
to the differences (temporary difference) between the carrying amount of the assets or liabilities and
its tax base. Deferred income tax assets shall be respectively recognized for deductible tax losses that
can be carried forward in accordance with tax law requirements for deduction of taxable income in
subsequent years. No deferred income tax liabilities shall be recognized for any temporary difference
arising from goodwill initially recognition. No deferred income tax assets or liabilities shall be
recognized for any difference arising from assets or liabilities initial recognition on non-business
combination with no effect on either accounting profit or taxable profit (or deductible tax loss). At
the balance sheet date, deferred income tax assets and deferred income tax liabilities are measured at
the tax rates that are expected to apply to the period when the asset is realized or liability is settled.
Deferred income tax assets are recognized to the extent that it is probable that future taxable profit
will be available to offset the deductible temporary difference, deductible loss and tax reduction.
31. Lease
The Company’s leasing business includes operating lease and financing lease.
As an operating lease lessee and lesser, the lease premium shall be recognized in the cost of asset
based on straight line method within the period or directly to income statement.
As a financing lease lessee, the lower of the fair value of leased assets and the present value of the
minimum lease payments is recognized as the leased asset, the minimum lease payments are
recognized as the long-term payables, and the difference is recognized as unrecognized finance
expense at the inception of the lease. The company shall adopt the effective interest method to
amortize and record as the financial costs during the assets lease term.
32. Held for sale
（1） Any non-current assets or disposal group shall be classified as held for sale if the
following criteria are met: 1) According to the similar transactions for selling such assets or disposal
group in practice, the assets must be available for immediate sale under current condition. 2) The
sale is highly probable with decision made on a probable selling proposal and the firm purchase
commitment has been obtained, the sale is expected to be completed within one year. Certain
regulations request that approvals must be given by relevant authority or supervision regulator
before the assets can be sold. Prior to the assets initially classified as held for sale or disposal group,
the carrying amounts of the asset (or all the assets and liabilities in the disposal group) shall be
measured in accordance with applicable accounting standards. The Company shall recognize an
impairment loss and account it in to income statement for the current period, for any initial or
subsequent write- down of the asset (or disposal group) to its fair value less costs to sell if the
carrying amount is higher than its fair value less costs to sell. In the meantime, provision for assets
impairment shall be made.
（2） The company acquires a non-current asset(or disposal group) exclusively with a view to its
subsequent resale, it shall be classified as held for sale at the acquisition date only if the condition of
“expected sale can be completed within one year” can be met and also other conditions of classified
as held for sale can highly probably be met within a short period following the acquisition(usually
with three months). When measuring a newly acquired asset (or disposal group) meeting the criteria
to be classified as held for sale, it shall be measured at the lower of its carrying amount had it not
been so classified and fair value less costs to sell. Except the non-current assets or disposal group
acquired as part of a business combination, the difference between its fair value less costs to sale and
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initial carrying amount is recognized in the income statement.
（3） The Company that loss of control of a subsidiary due to a sale plan of its investment shall
classify its subsidiary planned for sale as a whole as held for sale in the single financial statement of
the parent only if the investment in subsidiary meets the criteria of held for sale, regardless of
whether the Company will retain a proportion of equity interest in its former subsidiary after sale,
and classify all assets and liabilities of the subsidiary as held for sale in the consolidated financial
statements
（4） The Company shall recognize a gain for any subsequent increase in fair value less costs to
sell of an asset and shall reverse the impairment to the extent that previously recognized when being
classified as held for sale, the revisable amount is recognized in the income statement for the period.
Any impairment from the period when the assets are not classified as held for sale cannot be
reversed.
（5） The impairment loss recognized for a disposal group shall reduce the carrying amount of
goodwill of disposal group first, and then reduce the carrying amount of the non-current assets based
on its proportion on the book.
（6）The Company shall recognize a gain for any subsequent increase in fair value less costs to sell
of a disposal group and shall reverse the impairment to the extent that previously recognized when
being classified as held for sale, in accordance with applicable measuring standards, the revisable
amount is recognized in the income statement for the period. Any impairment from the period when
the assets are not classified as held for sale and reduced goodwill cannot be reversed.
（7）For any subsequently reversed amount, after the impairment loss is recognized for held for sale
disposal group, the Company shall increase the carrying amount of disposal group based on the
proportion of carrying amount of non-current assets excluding goodwill.
（8） Non-current assets classified as held for sale or disposal group shall not be depreciated or
amortized, interest and other expenses attributable to the liabilities of a disposal group classified as
held for sale shall continue to be recognized.
（9） When held for sale assets or disposal group cannot meet the criteria for held for sale
classification so that they are not recognized as held for sale or non-current asset will be removed
from disposal group, they shall be measured at the lower of the following amounts: ⑴carrying
amount of assets prior to it classified as held for sale, which is the amount after depreciation,
amortization or impairment adjustment as it had not been classified as held for sale ; ⑵recoverable
amount.
（10）When the Company derecognizes the held for sale assets or disposal group, the remaining
unrecognized gain or loss shall be accounted in the income statement.
33. Discontinued operation
When meeting any one of the following criteria, the component can be identified separately and the
component has already been disposed off or classified as held for sale: (1) the component represents
one independent main business or one single main business area; (2) the component plans to be part
of the related plan which represents one independent main business or one single main business area;
(3) the component was specially acquired for resale
34. Other significant accounting policies, accounting estimates
When preparing the financial statements, the management needs to use accounting estimate and
assumption, which will have effect on the application of accounting policy and amount of asset,
liability, income and expense. The actual circumstance maybe differs from the estimates. The
management needs to continuously assess the key assumption involved by estimate and the
judgment on uncertainty. Effect on the accounting estimate shall be recognized during the period
when estimate is changed and in future.
The following accounting estimate and key assumption will trigger the significant risk of significant
adjustment on the book value of asset and liability during the period of future.
（1） Impairment of financial instrument
The company uses expected credit loss model to assess any impairment of financial asset. When
applying expected credit loss model, the company shall take all necessary factors into account as
requested such as significant judgment, estimate and all reasonable and supportable information
including forward looking information. Repayment history in conjunction with economic policy,
macro environment ratio, industry and sector risk etc shall also be considered when judging expected
change of debtor’s credit risk.
（2） Provision of inventory impairment
Inventory is periodically evaluated at the net realizable value and any cost higher than NRV shall be
71 / 141
recognized as inventory impairment loss. When evaluating the NRV, net realizable value is
determined by deducting the expected selling expense and relative tax from the estimated selling
price. When actual selling price or cost differs from the previous estimates, management will make
adjustment on NRV. Therefore, the results based on the present experience may differ from the actual
results, which caused the adjustment on the carrying amount of inventory in the book. Provision for
inventory impairment may vary with the above reasons. Any adjustment on provision for inventory
impairment will affect the income statement.
（3） Provision of goodwill impairment
Each year, goodwill shall be assessed for any impairment. Recoverable amount of assets group or
asset portfolio including goodwill shall be the present value of future cash flow, which needs
estimates for calculation.
If management adjust the gross profit margin adopted by the present value of future cash flow
calculation of assets group or asset portfolio, adjusted gross profit margin is lower than the margin
applied, the impairment is required.
If management adjust the discounting rate before tax applied by the present value of future cash flow
calculation of assets group or asset portfolio, adjusted discounting rate before tax is higher than the
rate applied, the impairment is required.
If actual profit margin or discounting rate before tax is higher or lower than management’s estimate,
any impairment recognized before cannot be reversed.
（4） Provision of fixed asset impairment
At the balance sheet date, the management shall implement impairment test on buildings, plant and
machinery etc which has any impairment indicator. The recoverable amount of FA is the higher of
PV of future cash flow and net value of fair value after disposal cost, the calculation needs
accounting estimate.
If management adjust the gross profit margin adopted by the present value of future cash flow
calculation of assets group or asset portfolio, adjusted gross profit margin is lower than the margin
applied, the impairment is required.
If management adjust the discounting rate before tax applied by the present value of future cash flow
calculation of assets group or asset portfolio, adjusted discounting rate before tax is higher than the
rate applied, the impairment is required.
If actual profit margin or discounting rate before tax is higher or lower than management’s estimate,
any impairment recognized before cannot be reversed.
（5） Recognition of deferred tax assets
Estimate on deferred tax assets needs making estimation of taxable income and applied tax rate in
the following years in future. Whether deferred tax asset can be realized depends on the enough
probable taxable profit obtained in future. Tax rate change in future and the timing of temporary
difference reverse may also affect the income tax expense(income)and the balance of deferred tax.
Any change of estimate described here will cause the deferred tax adjustment.
（6） Useful life span of fixed assets and intangible assets
At least every year end, the management shall review the useful life of FA and intangible assets.
Expected useful life is based on the management’s experience on the same class of assets, with
reference to the estimate applied in the industry in conjunction with expected technology
development. When previous estimate significantly changed, depreciation and amortization in the
future shall be adjusted accordingly.
35. Changes in Accounting Policies, Accounting Estimates
(1) Change in significant accounting policies
Changes on accounting policy and reasons Approval progress Memo
On July 5th, 2017, the Ministry of Finance announced amendment
to “Accounting Standards for Business Enterprises
No.14-Revenue "(No22 Caikuai [2017]) (hereinafter referred to
as “new revenue standard”). Since January 1, 2018, the new The accounting policy
revenue standard took effect for either the company both listed in change has been
overseas and domestic or IFRS or Accounting Standards for approved by the 9th Note
Business Enterprises adoption of the company listed overseas. meeting of the 8th
The rest of domestic listed companies shall adopt the standard generation of board.
since January 1, 2020. When preparing the financial statements
for 2020FY, the policy has been adopted and the accounting has
been done in accordance with this standard.
72 / 141
Changes on accounting policy and reasons Approval progress Memo
Note. New revenue standard
New revenue standard took effect since January 1, 2020 and introduced 5 steps for revenue
recognition and gave more instruction to special transactions (or matters). The new revenue
accounting policy is referred to the note IV. 28. The new revenue standard requests the cumulative
effects shall be adjusted in the opening accounts (on January 1, 2020) of retained earnings and other
items in the financial statements for the first adoption and no adjustments are requested for the
comparative figures. When adopting the new revenue standard, the company only adjusted the
cumulative effects for incomplete contract on the first adoption date. Any changes of contract prior
to the beginning period of the first adoption year, shall be simplified by the company. New revenue
standard adoption and effect on the comparison figure as follows:
Consolidated balance sheet
Effect on new
Effected Items December 31st,2019 January 1st,2020
standard adoption
Accounts receivable 1,030,342,541.88 -73,210,394.19 957,132,147.69
Contract asset 73,210,394.19 73,210,394.19
Received in advance 160,571,622.53 -160,571,622.53
Contract liability 142,098,781.00 142,098,781.00
Other current liability 18,472,841.53 18,472,841.53
Balance sheet of parent company
Effect on new
Effected Items December 31st,2019 January 1st,2020
standard adoption
Accounts receivable 526,554,114.61 -17,803,062.64 508,751,051.97
Contract asset 17,803,062.64 17,803,062.64
Received in advance 47,114,426.48 -47,114,426.48
Contract liability 41,694,182.73 41,694,182.73
Other current liability 5,420,243.75 5,420,243.75
(2) Changes in significant accounting estimates
No.
V. Taxation
1. The main applicable tax and rate to the Group as follows:
Tax Tax base Tax rate
Value-added tax Sales revenue or Purchase 6%、9%、13%
(VAT)
City construction Value-added tax payables 7%
tax
Education surcharge Value-added tax payables 3%
Local education Value-added tax payables 2%
surcharge
Enterprise income Current period taxable profit 15% or 25%
tax(EIT)
Real estate tax 70% of cost of own property or 1.2% or 12%
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revenue from leasing property
Land use tax Land using right area Fixed amount per square meter
Other tax According to the relevant
provisions of the state and local
Notes for tax entities with different EIT rate
Tax entities EIT rate
Bingshan Refrigeration & Heat Transfer Technologies Co. ,Ltd 15%
Dalian Bingshan Group Engineering Co., Ltd. 25%
Dalian Bingshan Group Sales Co., Ltd. 25%
Dalian Bingshan Air-conditioning Equipment Co., Ltd. 15%
Dalian Bingshan JiaDe Automation Co., Ltd. 15%
Dalian Bingshan Lingshe Quick Freezing Equipment Co., Ltd. 25%
Wuhan New World Refrigeration Industrial Co., Ltd. 15%
Bingshan Technical Service （Dalian） Co., Ltd. 15%
Dalian Bingshan International Trading Co. ,Ltd 25%
Dalian Niweisi LengNuan Techonoligy Co., Ltd. 15%
Dalian Xinminghua Electrical Technology Co., Ltd 15%
2. Tax preference
The company obtained the qualification of high and new technology enterprises on 3rd December,
2020 approved by Dalian Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax
Bureau and Local tax Bureau. The Certificate No. is GR202021200646, and the validity duration is
three years. According to the tax law, the company can be granted for the preferential tax policy of
enterprise income tax rate of 15% in three years.
The company’s subsidiary, Dalian Bingshan Air-conditioning Equipment Co., Ltd. obtained the
qualification of high and new technology enterprises on 3rd December, 2020 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax Bureau.
The Certificate No. is GR202021200672, and the validity duration is three years. According to the
tax law, the company can be granted for the preferential tax policy of enterprise income tax rate of
15% in three years.
The company’s subsidiary, Dalian Bingshan JiaDe Automation Co., Ltd. obtained the qualification of
high and new technology enterprises on 16th November, 2018 approved by Dalian Science
Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax Bureau. The
Certificate No. is GR20181200562, and the validity duration is three years. According to the tax law,
the company can be granted for the preferential tax policy of enterprise income tax rate of 15% in
three years.
The company’s subsidiary, Wuhan New World Refrigeration Industrial Co., Ltd obtained the
qualification of high and new technology enterprises on 15th November, 2018 approved by Hubei
Science Technology Bureau, Hubei Finance Bureau, Hubei State Tax Bureau and Hubei Local tax
Bureau. The Certificate No. is GR201842000605, and the validity duration is three years. According
to the tax law, the company can be granted for the preferential tax policy of enterprise income tax
rate of 15% in three years.
The company’s subsidiary, Bingshan Technical Service （ Dalian ） Co., Ltd. obtained the
qualification of high and new technology enterprises on 3rd December, 2020 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax Bureau.
The Certificate No. is GR202021200540, and the validity duration is three years. According to the
tax law, the company can be granted for the preferential tax policy of enterprise income tax rate of
15% in three years.
The company’s subsidiary, Dalian Niweisi LengNuan Techonoligy Co., Ltd. obtained the
qualification of high and new technology enterprises on 3rd December, 2020 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax Bureau.
The Certificate No. is GR202021200570, and the validity duration is three years. According to the
tax law, the company can be granted for the preferential tax policy of enterprise income tax rate of
15% in three years.
74 / 141
The company’s subsidiary, Dalian Xinminghua Electrical Technology Co., Ltd obtained the
qualification of high and new technology enterprises on 3rd December, 2020 approved by Dalian
Science Technology Bureau, Dalian Finance Bureau, Dalian State Tax Bureau and Local tax Bureau.
The Certificate No. is GR202021200699, and the validity duration is three years. According to the
tax law, the company can be granted for the preferential tax policy of enterprise income tax rate of
15% in three years.
VI. Notes to Consolidated Financial Statements
The following disclosure date on this financial statement without special indication, “opening” refers
to January 1, 2020; “closing” refers to December 31, 2020; “current period” refers to the period from
January 1, 2020 to December 31, 2020; and “last period” refers to the period from January 1, 2019 to
December 31, 2019; with the currency unit RMB.
1. Cash and cash in bank
Item Closing Balance Opening Balance
Cash on hand 154,668.54 92,096.63
Cash in bank 316,921,397.57 301,435,257.93
Other cash and cash equivalents 56,369,665.56 30,591,791.66
Total 373,445,731.67 332,119,146.22
Including: sum of deposits overseas
Note: Other cash and cash equivalents is restricted, including deposit for bank acceptance notes of
49,449,257.07Yuan, guarantee deposit of 5,906,560.44Yuan, migrant deposit of 1,013,848.05Yuan,
and frozen amount of 2,097,605.62 Yuan by the bank due to litigation total of 58,467,271.18Yuan.
2. Notes receivable
(1) Category of notes receivable
Items Closing Balance Opening Balance
Bank acceptance notes 109,424,884.35 71,184,057.96
Trade acceptance notes 29,696,153.43 48,763,268.45
Total 139,121,037.78 119,947,326.41
(2) Pledged notes receivable up to the end of year.
Items Closing pledged amount
Bank acceptance notes 12,175,402.47
Total 12,175,402.47
(3) Notes receivable endorsed or discounted but not mature at the end of year
Item Closing amount no more Closing amount still
recognized recognized
Bank acceptance notes 375,247,871.66 104,594,884.35
Trade acceptance notes 900,000.00 17,649,000.00
Total 376,147,871.66 122,243,884.35
(4) Transfer to receivable as the drawer’s default of performance of obligation
Items Amount to be transferred to receivable
Trade acceptance notes 12,607,409.17
Total 12,607,409.17
(5) Categories according to bad debts provision
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debts provision
based on group
75 / 141
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Including: bank
109,424,884.35 77.41 109,424,884.35
acceptance notes
Trade acceptance
31,938,216.21 22.59 2,242,062.78 7.02 29,696,153.43
notes
Total 141,363,100.56 100.00 2,242,062.78 1.59 139,121,037.78
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debts provision
based on group
Including: bank
71,184,057.96 57.64 - 71,184,057.96
acceptance notes
Trade acceptance
52,316,066.01 42.36 3,552,797.56 6.79 48,763,268.45
notes
Total 123,500,123.97 100.00 3,552,797.56 2.88 119,947,326.41
Categories based on group
Closing Balance
Items
Booking balance Provision Provision（%）
Trade acceptance notes 31,938,216.21 2,242,062.78 7.02
Total 31,938,216.21 2,242,062.78 -
(6) Bad debt provision of notes receivable accrued, collected and reversed
Opening Change during the year Closing
Category
balance Accrued Collected/reversed Written-off Balance
Bad debt
3,552,797.56 1,310,734.78 2,242,062.78
provision
Total 3,552,797.56 1,310,734.78 2,242,062.78
(7) Bad debt provision is reversed of 1,310,734.78Yuan as the notes receivable of decreased
20,377,849.80 Yuan by comparing the opening and closing balance.
(8) Notes receivable written off: none
3. Accounts receivable
(1) Category of accounts receivable
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Accounts receivable
with significant
individual amount 9,375,092.34 0.85 262,313.88 2.80 9,112,778.46
and separate bad
debt provision
Accounts receivable
with bad debt
provision based on 1,089,352,275.04 99.15 281,453,097.75 25.84 807,899,177.29
the characters of
credit risk portfolio
Including: aging as
1,089,352,275.04 99.15 281,453,097.75 25.84 807,899,177.29
characteristics of
76 / 141
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
credit risk
Total 1,098,727,367.38 100.00 281,715,411.63 25.64 817,011,955.75
Note: since January 1st, 2020, financial instrument new standard was adopted. The opening figures
of receivable shall be remeasured on the first adoption date. Refer to Note IV.35.
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Accounts receivable
with significant
individual amount 51,480,562.10 4.16 12,628,091.84 24.53 38,852,470.26
and separate bad
debt provision
Accounts receivable
with bad debt
provision based on 1,187,306,522.58 95.84 269,026,845.15 22.66 918,279,677.43
the characters of
credit risk portfolio
Including: aging as
characteristics of 1,187,306,522.58 95.84 269,026,845.15 22.66 918,279,677.43
credit risk
Total 1,238,787,084.68 100.00 281,654,936.99 22.74 957,132,147.69
1) Accounts receivable with the bad debt provisions under single identification method
Closing Balance
Name Provision
Accounts Proportion
for bad Reason
receivable (%)
debts
Changsha Xiandao
The court has mediated, there
Zhendi Estate
680,940.10 is a preservation of property,
Development Co.
no expected credit loss
Ltd
The court has mediated the
Changsha Runyi repayment in installments,
Chengxiang which has been executed on
240,000.00 3,881.81 1.62
Development Co., schedule, and the credit risk is
Ltd expected to be significantly
reduced
Wuhan BOE
Optoelectronic 4,270,103.50 90,979.27 2.13
Technology Co. Ltd
Chengdu BOE
Both parties shall comply with
Optoelectronic 3,078,990.00 144,372.82 4.69
the agreement and execute it
Technology Co. Ltd
on schedule, and expect the
Mianyang BOE
credit risk to be significantly
Optoelectronic 779,807.04 16,706.41 2.14
reduced
Technology Co. Ltd
BOE (Hebei)
Mobile Display 325,251.70 6,373.57 1.96
Technology Co. Ltd
77 / 141
Closing Balance
Name Provision
Accounts Proportion
for bad Reason
receivable (%)
debts
Total 9,375,092.34 262,313.88 2.80
2) Accounts receivable with the bad debt provisions under accounting aging analysis method
Closing Balance
Aging Drawing
Accounts Provision for bad
proportion
receivable debts
(%)
Within 1 year 478,146,198.85 33,565,863.17 7.02
1 to 2 years 170,319,404.20 28,511,468.28 16.74
2 to 3 years 208,709,249.82 64,345,061.71 30.83
3 to 4 years 129,504,581.46 63,884,610.03 49.33
4 to 5years 41,388,675.55 29,861,929.40 72.15
Over 5 years 61,284,165.16 61,284,165.16 100.00
Total 1,089,352,275.04 281,453,097.75 -
(2) Receivable listed by aging
Aging Closing Balance
Within 1 year 479,067,138.95
1 to 2 years 170,319,404.20
2 to 3 years 217,163,402.06
3 to 4 years 129,504,581.46
4 to 5years 41,388,675.55
Over 5 years 61,284,165.16
Total 1,098,727,367.38
(3)Bad debt provision of current period
Change during the year
Categor Opening Closing
y balance Accrued Collected/reverse Balance
Written-off
d
Bad debt 281,654,936.9 27,826,220.2 21,501,506.0 281,715,411.6
6,264,239.58
provision 9 8 6 3
Total 281,654,936.9 27,826,220.2 21,501,506.0 281,715,411.6
6,264,239.58
9 8 6 3
(4) Accounts receivable written off in current period
Item Written off amount
Receivable actually written off 11,399,875.54
(5) The top five significant accounts receivable categorized by debtors
% of the Closing Balance
Company Closing Balance Aging
total AR of Provision
Xinyi Yuanda
2-3 years
Construction and
32,748,744.00 3-4 years 2.98 17,525,571.61
Installation Engineering
4-5 years
Co., Ltd.
Panasonic Appliances
Cold Chain (Dalian) 31,200,329.39 Within 1 year 2.84 2,190,263.12
Co. ,Ltd
Qingchengxian Zhongyi
26,600,000.00 Within 1 year 2.42 1,867,320.00
Energy Co.,Ltd
78 / 141
% of the Closing Balance
Company Closing Balance Aging
total AR of Provision
Shenzhen Zhaofude
Tourism Development 21,266,895.56 2-3 years 1.94 6,556,583.90
Co., Ltd
Within 1 year
Ningxia Wangwa Coal
20,631,495.12 1-2 years 1.88 4,901,311.52
Industry Co., Ltd
2-3 years
Total 132,447,464.07 - 12.06 33,041,050.15
4. Finance receivable
Items Closing Balance Opening Balance
Notes receivable 61,737,282.56
Total
61,737,282.56
5. Prepayments
(1) Aging of prepayments
Closing Balance Opening Balance
Items Amount Percentage Amount Percentage
(%) (%)
Within 1 year 111,133,100.83 71.93 112,706,836.54 78.93
1 to 2 years 24,880,404.77 16.11 17,090,076.33 11.97
2 to 3 years 9,313,439.77 6.03 4,786,466.74 3.35
Over 3 years 9,154,563.98 5.93 8,203,148.96 5.75
Total 154,481,509.35 100.00 142,786,528.57 100.00
Significant prepayments over 1 year
Closing Unsettled Reasons
Company Aging
Balance
Dalian Hengtong Refrigeration 1-2 years Contract is not fully
5,720,000.00
Equipment engineering Co., Ltd 2-3 years implemented
Shanghai POMA Automation Contract is not fully
4,272,900.00 4-5 years
Equipment Co., Ltd implemented
Within 1 year
Contract is not fully
Dalian Jingdian Steel Work Co., Ltd 3,965,236.72 1-2 years
implemented
2-3 years
1-2 years
Contract is not fully
Yunnan Xinneng Technology Co., Ltd 2,554,677.66 2-3 years
implemented
3-4 years
Contract is not fully
Anhui Songze Energy Co., Ltd 2,080,000.00 1-2 years
implemented
Total 18,592,814.38 — —
(2) The top five significant advances to suppliers categorized by debtors
% of the total
Company Closing Balance Aging advances to
suppliers
Dalian Shentong Electric Co., Ltd. 15,926,281.36 Within 1year 10.31
Shenyang Baogang Northeast
7,640,955.64 Within 1year 4.95
Trading Co., Ltd
Dalian Hengtong Refrigeration 1-2 years
5,720,000.00 3.70
Equipment engineering Co., Ltd 2-3years
Hangzhou Zhonghong New Energy
5,703,000.00 Within 1year 3.69
Co., Ltd
Within 1year
Dalian Shengda Construction Co.,Ltd 4,301,257.15 2.78
1-2years
79 / 141
% of the total
Company Closing Balance Aging advances to
suppliers
Total 39,291,494.15 - 25.43
6. Other receivables
Items Closing Balance Opening Balance
Interest receivable 46,879.68 583,833.33
Dividend receivable 25,923.75 33,450.00
Other receivables 67,454,373.43 38,113,945.24
Total 67,527,176.86 38,731,228.57
6.1 Interest receivable
(1) Classification
Items Closing Balance Opening Balance
Interest on term deposits 46,879.68 583,833.33
Total 46,879.68 583,833.33
6.2. Dividends receivable
(1) Classification
Company Closing Balance Opening Balance
Wuhan Steel and Electricity Co., Ltd. 25,923.75 33,450.00
Total 25,923.75 33,450.00
6.3. Other receivables
(1) The categories of other receivable according to nature
Items Closing Balance Opening Balance
Deposits 26,232,362.26 23,419,558.44
Petty cash 5,325,764.44 8,132,205.01
Receivables and payables 47,714,138.78 13,757,372.35
Others 1,619,770.46 225,649.71
Total 80,892,035.94 45,534,785.51
(2) The bad debt provision of other receivables
1st stage 2nd stage 3rd stage
bad debt Expected credit Expected credit loss
Expected credit Total
provision loss within the within the whole
loss within 12
whole period (no period (impairment
months
impairment) incurred)
Opening
7,420,840.27 7,420,840.27
balance
Opening
balance during — — — —
the year
--transfer to
the 2nd stage
--transfer to
the 3rd stage
--reverse to the
2nd stage
----reverse to
the 1st stage
Accrued 6,016,822.24 6,016,822.24
80 / 141
1st stage 2nd stage 3rd stage
bad debt Expected credit Expected credit loss
Expected credit Total
provision loss within the within the whole
loss within 12
whole period (no period (impairment
months
impairment) incurred)
Reverse
Cancelation
Written off
Other
movement
Closing
13,437,662.51 13,437,662.51
balance
(3) Other receivable listed by account aging
Aging Closing Balance
Within 1 year 55,270,802.17
1-2 years 9,425,442.61
2-3 years 6,529,531.98
3-4 years 4,742,652.47
4-5 years 2,561,000.00
Over 5 years 2,362,606.71
Total 80,892,035.94
(4) Provision for bad debt
Opening Change during the year Closing
Category
balance Accrued Collected/reversed Written-off Balance
Bad debt
7,420,840.27 6,016,822.24 13,437,662.51
provision
Total 7,420,840.27 6,016,822.24 13,437,662.51
(5) Other receivables written off in current period: none.
(6) Other receivables from the top 5 debtors
Closing
Closing % of the
Name Category Aging Balance of
Balance total OR
Provision
Dalian Bingshan Share Within 1
36,263,700.00 44.83 2,371,645.98
GroupCo., Ltd transfer year
State Taxation
Administration Dalian Export tax Within 1
4,990,693.19 6.17 326,391.33
Shahekou District refund year
Bureau
Huangmei Kanghong
Eco Agriculture Deposit 2,279,000.00 2-3 years 2.82 712,187.50
Development Co., Ltd
Within 1
Agriculture Bureau of
Deposit 2,548,847.50 year 3.15 285,348.11
Moyu County
1-2years
Dalian Huali Coating Outstanding
1,650,000.00 3-4 years 2.04 833,745.00
Equipment Co., Ltd debtor
Total 47,732,240.69 - 59.01 4,529,317.92
(7) Other receivables from government grant: none
7. Inventories
81 / 141
(1) Categories of inventories
Closing Balance
Item
Book value Provision for decline Net book value
Raw materials 103,332,663.42 1,064,716.71 102,267,946.71
Working in progress 117,243,035.94 1,929,842.21 115,313,193.73
Finished goods 244,721,287.34 2,528,193.70 242,193,093.64
Low-value consumable 171,759.42 171,759.42
Self-manufactured
28,814,287.69 28,814,287.69
semi-finished products
Cost to fulfill the
193,840,972.71 193,840,972.71
contract
Materials on
consignment for further 480,473.35 480,473.35
processing
Goods in transit 33,573,632.23 33,573,632.23
Properties written off
20,206,542.00 5,203,103.50 15,003,438.50
debtors
Total 742,384,654.10 10,725,856.12 731,658,797.98
(Continued)
Opening Balance
Item
Book value Provision for decline Net book value
Raw materials 99,955,218.42 1,089,032.88 98,866,185.54
Working in progress 101,259,171.98 101,259,171.98
Finished goods 225,850,272.78 50,000.00 225,800,272.78
Low-value consumable 137,722.99 137,722.99
Self-manufactured
26,595,183.32 26,595,183.32
semi-finished products
Cost to fulfill the
85,532,846.86 1,200,000.00 84,332,846.86
contract
Materials on
consignment for further 2,505,829.92 2,505,829.92
processing
Total 541,836,246.27 2,339,032.88 539,497,213.39
(2) Provision for decline in the value of inventories
Increase Decrease
Opening Closing
Item Reverse/ Others
Balance Accrual Balance
Written- off transferred
Raw materials 1,050,572.88 24,316.17 1,026,256.71
Finished goods 88,460.00 2,478,193.70 2,566,653.70
Cost to fulfill
1,200,000.00 1,200,000.00
the contract
WIP 1,929,842.21 1,929,842.21
Properties
written off 5,203,103.50 5,203,103.50
debtors
Total 2,339,032.88 9,611,139.41 1,224,316.17 10,725,856.12
Accrual for provision for decline in the value of inventories
82 / 141
Basis for net realizable value
Item Reasons for reverse/write-off
recognition
Raw materials Lower of cost and NRV Sold within the year
Finished goods Lower of cost and NRV Sold within the year
Completed constructing
Lower of cost and NRV
projects unsettled
8. Contract asset
(1) Details
Closing Balance Opening Balance
Item Carrying Carrying provision Book value
Provision Book value
amount amount
Undue 104,165,706.1 12,735,694.5 91,430,011.6 80,880,830.0 73,210,394.1
7,670,435.90
warranty 0 0 0 9 9
104,165,706.1 12,735,694.5 91,430,011.6 80,880,830.0 73,210,394.1
7,670,435.90
Total 0 0 0 9 9
(2) Significant change and reason of carrying amount of contract asset
Item Closing Balance Reason
Warranty 23,284,876.01 Complete performance of obligation
Total 23,284,876.01
(3) Provision for impairment
Item Accrued Reverse Collected/written off Reason
Undue warranty 5,065,258.60
Total 5,065,258.60
9. Noncurrent asset due within one year
Item Closing Balance Opening Balance Nature
Long term receivable due within 1 year 42,003,576.60
Total 42,003,576.60
10. Other current assets
Item Closing Balance Opening Balance Nature
Prepaid income tax presented at net
390,518.40 926,962.16
amount after offsetting
VAT to be deducted 22,375,761.22 13,114,701.01
Prepaid turnover tax 1,876.94 11,143.58
Prepaid expenses 445,934.88 119,323.70
Total 23,214,091.44 14,172,130.45
11. Long term receivable
(1) Details
Item Closing Balance
Carrying
Provision Book value
amount
Lease premium
---Unrealized financing income
Goods sold by installments 71,750,205.16 5,882,231.91 65,867,973.25
---Unrealized financing income 4,129,869.98 4,129,869.98
Services rendered by installments
83 / 141
Total 71,750,205.16 5,882,231.91 65,867,973.25
(2) Provision for bad debt
1st stage 2nd stage 3rd stage
bad debt Expected credit loss Expected credit loss
Expected credit Total
provision within the whole within the whole
loss within 12
period (no period (impairment
months
impairment) incurred)
Opening
— — — —
balance
Opening
balance during
the year
--transfer to
the 2nd stage
--transfer to
the 3rd stage
--reverse to the
2nd stage
----reverse to
the 1st stage
Accrued 5,882,231.91 5,882,231.91
Reverse
Cancelation
Written off
Other
movement
Closing
5,882,231.91 5,882,231.91
balance
84 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
12.Long-term equity investments
Increase/Decrease
Gains and Adjust Provision Provisi
Beginning losses ment of Cash bonus for Ending on for
Investee Change
balance Incre recognized other or profits impairme balance impair
Decreased of other Others
ased under the compre announced nt of the ment
equity
equity hensive to issue current
method income period
Associates
Panasonic Appliances
Air-Conditioning and 177,390,883.01 1,958,795.95 6,800,000.00 172,549,678.96
Refrigeration (Dalian)
Co., Ltd
Panasonic Cold-Chain 267,179,066.77 7,354,346.53 274,533,413.30
(Dalian) Co., Ltd.
Panasonic Compressor 471,693,615.32 30,151,282.66 36,026,000.00 465,818,897.98
(Dalian) Co., Ltd.
Dalian Honjo Chemical 8,535,439.50 561,233.80 350,476.27 8,746,197.03
Co., Ltd.
Keinin-Grand Ocean
Thermal Technology 61,090,955.30 3,444,000.08 8,600,000.00 55,934,955.38
(Dalian) Co., Ltd.
Beijing Huashang
Bingshan Refrigeration 1,537,672.85 584,278.85 2,121,951.69
and Air-conditioning
Machinery Co., Ltd.
Dalian Fuji Bingshan
Vending Machine Co., 193,109,792.44 -8,655,654.23 184,454,138.22
Ltd.
MHI Bingshan
Refrigeration (Dalian) 13,892,866.25 998,253.42 14,891,119.67
Co.,Ltd.
85 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Increase/Decrease
Gains and Adjust Provision Provisi
Beginning losses ment of Cash bonus for Ending on for
Investee Change
balance Incre recognized other or profits impairme balance impair
Decreased of other Others
ased under the compre announced nt of the ment
equity
equity hensive to issue current
method income period
Dalian Fuji Iceberg
Vending Machine Sales 12,614,480.80 -12,570,934.45 43,546.35
Co., Ltd
Changzhou Jingxue
Refrigeration Equipment 185,385,615.80 17,823,213.17 203,208,828.97
Co., Ltd.
Panasonic cold Machine
System (Dalian) Co., 33,975,371.41 5,973,075.90 2,528,392.05 37,420,055.26
Ltd
Dalian Bingshan Metal 172,730,683.20 28,938,783.80 28,510,920.84 173,158,546.15
Technology Co.,Ltd
Dalian Bingshan Group
Management and 57,778,289.15 58,800,000.00 1,021,710.84
Consulting Co.,ltd
Wuhan Sikafu Power
Control Equipment Co., 5,266,277.34 -906,242.68 4,360,034.66
Ltd
Total 1,662,181,009.14 58,800,000.00 76,676,143.64 82,815,789.16 1,597,241,363.62
86 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
13. Other non-current financial assets
Item Closing Balance Opening Balance
239,304,098.83 303,469,706.51
Financial assets classified as FVTPL
239,304,098.83 303,469,706.51
Including: equity instruments
239,304,098.83 303,469,706.51
Total
14. Investment property
(1) Investment property measured as cost model
Property&
Item Land-use-rights Total
building
I. Initial cost
1. Opening balance 194,717,932.54 24,391,511.82 219,109,444.36
2. Increase 38,494,929.75 1,702,926.56 40,197,856.31
(1) Purchase
(2) Transferred from fixed assets 38,494,929.75 1,702,926.56 40,197,856.31
3. Decrease 980,000.00 980,000.00
(1) Disposal 980,000.00 980,000.00
(2)Transferred to other
4. Closing Balance 232,232,862.29 26,094,438.38 258,327,300.67
II. Accumulated depreciation
1. Opening balance 112,054,714.34 10,854,222.78 122,908,937.12
2. Increase 8,296,333.21 930,592.51 9,226,925.72
(1)Provision or amortization 4,019,331.17 487,830.24 4,507,161.41
(2) Acquired from business
4,277,002.04 442,762.27 4,719,764.31
combination
3. Decrease 97,040.09 97,040.09
(1) Disposal 97,040.09 97,040.09
(2) Transferred to other
4. Closing balance 120,254,007.46 11,784,815.29 132,038,822.75
III. Impairment reserve
1. Opening balance
2. Increase
(1)Provision or amortization
3. Decrease
(1) Disposal
(2) Transferred to other
87 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Property&
Item Land-use-rights Total
building
4. Closing balance
IV. Book value
1. Closing book value 111,978,854.83 14,309,623.09 126,288,477.92
2. Opening book value 82,663,218.20 13,537,289.04 96,200,507.24
15. Fixed assets
Items Closing Book Value Opening Book Value
Fixed asset 891,147,058.82 992,435,172.94
Fixed asset clearance
Total 891,147,058.82 992,435,172.94
(1) Fixed assets detail
Property& Machinery Transportatio Other
Item Total
buildings equipments n equipments equipments
I. Initial cost
1.Opening 719,373,101.5 745,999,413. 68,985,144.1 1,550,378,039.
16,020,380.97
balance 3 09 0 69
30,275,594.3
2. Increase 337,916.92 1,717,256.62 2,431,992.14 34,762,760.03
5
(1) Purchase 54,455.45 2,092,768.08 1,717,256.62 2,420,054.08 6,284,534.23
(2) Transferred
from
283,461.47 1,134,356.13 11,938.06 1,429,755.66
construction-in-
progress
(2) Sold and
27,048,470.1
lease 27,048,470.14
4
back
(3) Acquire
d from
business
combina
tion
149,017,465. 194,704,494.6
3. Decrease 38,494,929.75 3,881,109.17 3,310,990.62
07 1
18,970,524.9
(1) Disposal 3,881,109.17 1,138,474.52 23,990,108.65
6
(2) Transferred
38,494,929.75 38,494,929.75
to other
(3) Sold and
130,046,940. 132,219,456.2
lease 2,172,516.10
11 1
back
(4)Acquired
from business
combination
4.Closing 681,216,088.7 627,257,542. 68,106,145.6 1,390,436,305.
13,856,528.42
balance 0 37 2 11
88 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Property& Machinery Transportatio Other
Item Total
buildings equipments n equipments equipments
II.
Accumulated
depreciation
1.Opening 99,448,302.37 396,894,395.44 11,794,584.34 49,288,265.10 557,425,547.25
balance
2. Increase 17,663,127.00 47,870,222.79 947,149.55 5,401,756.11 71,882,255.45
(1)Accrued 17,663,127.00 47,870,222.79 947,149.55 5,401,756.11 71,882,255.45
(2)Acquired
from business
combination
3. Decrease 4,374,042.13 120,418,857.56 3,191,115.07 2,551,861.15 130,535,875.91
(1) Disposal 97,040.09 17,688,248.32 3,191,115.07 1,006,811.43 21,983,214.91
(2) Transferred 4,277,002.04 4,277,002.04
to other
(3) Sold and
lease 102,730,609.24 1,545,049.72 104,275,658.96
back
(4)Acquired
from business
combination
4.Closing 112,737,387.24 324,345,760.67 9,550,618.82 52,138,160.06 498,771,926.79
balance
III.
Impairment
reserve
1.Opening 517,319.50 517,319.50
balance
2. Increase
(1)Accrued
3. Decrease
(1) Disposal
4.Closing 517,319.50 517,319.50
balance
IV.Book value
1.Closing book 568,478,701.46 302,394,462.20 4,305,909.60 15,967,985.56 891,147,058.82
value
2.Opening 619,924,799.16 348,587,698.15 4,225,796.63 19,696,879.00 992,435,172.94
book value
(2) Temporarily idle fixed assets: none.
(3) Fixed assets leased out under operating lease: none.
(4) Financing lease
Accumulated Impairment
Item Initial cost Book value
depreciation reserve
Machinery &equipment 27,048,470.14 3,079,049.94 23,969,420.20
Total 27,048,470.14 3,079,049.94 23,969,420.20
16. Construction-in-progress
89 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Item Closing book value Opening book value
Construction-in-progress 34,254,599.42 36,285,056.80
Construction materials
Total 34,254,599.42 36,285,056.80
(1) Construction-in-progress details
Closing balance Opening balance
Item
Book balance Provision Book Value Book balance Provision Book value
Buildings &
3,628,913.65 3,628,913.65 14,866,010.00 14,866,010.00
reconstruction
Improvement of
3,724,069.06 3,724,069.06 502,148.95 502,148.95
machinery
Software of
intelligent 1,843,202.03 1,843,202.03 12,161,571.62 12,161,571.62
manufacture
Technical
renovation
project of
pressure energy 15,893,749.49 15,893,749.49
in natural gas
pipeline
network
Financing lease
9,164,665.19 9,164,665.19 8,755,326.23 8,755,326.23
item
Total 34,254,599.42 34,254,599.42 36,285,056.80 36,285,056.80
(2) Change in the significant construction in progress
Decrease
Opening Closing
Name Increase Transfer to FA/ Other
balance balance
Intangible assets decrease
Buildings &
14,866,010.00 3,912,375.12 283,461.47 14,866,010.00 3,628,913.65
reconstruction
Improvement of
502,148.95 4,368,214.30 1,146,294.19 3,724,069.06
machinery
Software of
intelligent 12,161,571.62 986,694.77 11,305,064.36 1,843,202.03
manufacture
Technical
renovation project
of pressure energy
15,893,749.49 15,893,749.49
in natural gas
pipeline
network
Financing lease
8,755,326.23 409,338.96 9,164,665.19
item
Total 36,285,056.80 25,570,372.64 1,429,755.66 26,171,074.36 34,254,599.42
(Continued)
90 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Progress Including:
Percent of Interest
of Accumulated accumulated
investment capitalizatio Source of
Name Budget construction capitalized capitalized
against n funds
interest interest of the
budget(%) rate(%)
year
Buildings &
Self
reconstructi 7,628,787.88 45.75 45.75
financing
on
Improveme
Self
nt of 21,830,520.40 17.06 17.06
financing
machinery
Software of
intelligent Self
3,690,750.00 49.94 49.94
manufactur financing
e
Technical
renovation
project of
pressure Self
19,614,500.00 81.03 81.03
energy in financing
natural gas
pipeline
network
Self
Financing
15,020,000.00 61.02 61.02 837,440.00 146,555.64 financing
lease item
borrowing
Total —
17. Intangible assets
Land use Non
Item Patent Others Total
right Patent
I. Initial cost
152,890,196. 17,630,188. 5,000,000.0 19,101,108. 194,621,494.
1.Opening balance
80 82 0 42 04
11,893,799. 11,893,799.4
2. Increase
40 0
(1) Purchase 588,735.04 588,735.04
(2) increase via
merge
(3) Transferred from
11,305,064. 11,305,064.3
construction-in-progr
36 6
ess
3. Decrease 1,702,926.56 1,702,926.56
(1) Disposal
(2)Transferred to
1,702,926.56 1,702,926.56
investment property
151,187,270. 17,630,188. 5,000,000.0 30,994,907. 204,812,366.
4.Closing balance
24 82 0 82 88
II.Accumulated
amortization
35,069,090.3 4,437,851.4 2,000,004.0 11,574,170. 53,081,115.9
1.Opening balance
2 5 0 17 4
1,600,948.2 3,044,698.7
2. Increase 1,585,645.00 500,000.00 6,731,291.97
0 7
91 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Land use Non
Item Patent Others Total
right Patent
1,600,948.2 3,044,698.7
(1)Accrued 1,585,645.00 500,000.00 6,731,291.97
0 7
(2)Increase from
merger
3. Decrease 442,762.27 442,762.27
(1) Disposal
(2) Transferred to
442,762.27 442,762.27
other
36,211,973.0 6,038,799.6 2,500,004.0 14,618,868. 59,369,645.6
4.Closing balance
5 5 0 94 4
III. Impairment
reserve
1. Opening balance
2. Increase
(1)Accrued
(2) Others
3. Decrease
(1) Disposal
(2) Transferred to
other
4.Closing balance
IV. Book value
1. Closing book 114,975,297. 11,591,389.1 2,499,996.0 16,376,038. 145,442,721.
value 19 7 0 88 24
2. Opening book 117,821,106. 13,192,337. 2,999,996.0 7,526,938.2 141,540,378.
value 48 37 0 5 10
18. Goodwill
(1) Original cost of goodwill
Increased during Decreased during
current year current year
Opening
Name Enterprises Closing Balance
Balance
merger Other Disposal Other
increase
Dalian Niweisi
LengNuan
1,440,347.92 1,440,347.92
Techonoligy Co.,
Ltd.
Dalian Bingshan
Group Construction 310,451.57 310,451.57
Co., Ltd
Total 1,750,799.49 1,750,799.49
(2) Goodwill impairment provision
In the year 2015, the book value of equity investment of Dalian Niweisi LengNuan Technology Co.,
Ltd exceeds the fair value of the proportion of the acquired company’s identifiable net asset. The
difference between the book value of equity investment of 48, 287,589.78 Yuan and the identifiable
net asset’s fair value of Dalian Sanyo High-efficient Refrigeration System Co., Ltd of 46,847,241.86
Yuan on the acquisition date of July 31st ,2015 is recognized as goodwill of 1,440,347.92 Yuan on
the group consolidated financial report at the end of the year.
92 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
In the year 2016, Dalian Bingshan Group Construction Co., Ltd purchases shares of Dalian Bingshan
Baoan Leisure Industry Co., Ltd and gains control. The transferred price is based on the net asset of
Dalian BingshanBaoan Leisure Industry Co., Ltd on June 30th , 2016. Negotiated with Dalian
Bingshan Baoan Leisure Industry Co., Ltd’s shareholder Baoan Water Project (China) Limited
Company, the transfer price is the combination cost on the purchasing date which is 5,359,548.42
Yuan, the fair value of proportion of Dalian BingshanBaoan Leisure Industry Company’s identifiable
net asset is 5,049,096.85 Yuan on the purchasing day, therefore, goodwill is 310,451.57Yuan on the
purchasing date. Dalian Bingshan Group Construction Co., Ltd absorbed Dalian Bingshan Baoan
Leisure Industry Co., Ltd in 2019.
The book value of goodwill from business combination of Dalian Niweisi LengNuan Technology
Co., Ltd and Dalian Bingshan Baoan Leisure Industry Co., Ltd which are not under same control
shall be allocated into the relevant asset group using the reasonable method since acquisition date
and taken impairment test on relevant asset group where the goodwill is included. The obvious
impairment indication of the goodwill hasn’t been found. Thus no goodwill impairment provision
has been made.
19. Long-term unamortized expense
Item Opening Other Closing
Increase Amortization
Balance Decrease balance
Employee’s dormitory use
2,012,170.38 138,478.32 1,873,692.06
right
Renovation and rebuilding 1,175,049.06 428,051.92 746,997.14
Lease 531,450.00 106,290.00 425,160.00
Membership fee for golf 440,000.00 16,500.00 423,500.00
Technology entrance fee of
840,206.25 373,425.00 466,781.25
cold and heat machinery
Greenland of new factory 6,616,523.14 892,115.52 5,724,407.62
Service fee from Technology
31,446.64 31,446.64
center
Total 11,646,845.47 1,986,307.40 9,660,538.07
20. Deferred tax assets and deferred tax liabilities
(1) Deferred tax assets without offsetting
Item Closing balance Opening balance
Deductible Deferred tax Deductible Deferred tax
temporary assets temporary assets
difference difference
Provision for
298,515,515.22 60,167,592.33 292,949,532.33 58,162,933.30
credit impairment
Provision for
impairment of 23,719,518.02 4,011,984.07 10,205,830.77 2,044,935.20
assets
Provision 7,171,726.51 1,792,931.63
Deductible loss 3,581,714.09 895,428.52
Unrealized profit
from internal 14,077,263.75 2,111,589.56 14,598,643.87 2,189,796.58
transaction
Total 347,065,737.59 68,979,526.11 317,754,006.97 62,397,665.08
(2) Deferred tax liabilities without offsetting
Item Closing balance Opening balance
93 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Taxable Deferred tax Taxable Deferred tax
temporary liabilities temporary liabilities
difference difference
Change on FV of other
noncurrent financial 213,402,432.24 32,010,364.83 274,768,039.93 41,215,205.99
assets
Total 213,402,432.24 32,010,364.83 274,768,039.93 41,215,205.99
(3) Unrecognized deferred tax assets details
Item Closing balance Opening balance
Deductible temporary difference 3,738,153.26 11,851,149.26
Deductible loss 107,036,874.97 97,241,944.12
Total 110,775,028.23 109,093,093.38
(4) Unrecognized deductible loss of deferred tax assets expired years
Year Closing balance Opening balance Notes
2020 3,240,819.97
2021
2022 716,158.09 716,158.09
2023 16,458,262.38 16,927,871.66
2024 62,405,136.73 76,357,094.40
2025 27,457,317.77
Total 107,036,874.97 97,241,944.12
21. Short-term borrowing
(1) Category of short term borrowing
Loan category Closing balance Opening balance
Credit loan 276,011,600.00 308,082,000.00
Mortgaged loan 6,960,000.00 47,170,000.00
Pledged loan
Guarantee loan
Total 282,971,600.00 355,252,000.00
22. Notes payable
Notes Category Closing balance Opening balance
Bank acceptance notes 293,073,330.48 292,314,922.58
Commercial acceptance notes 2,078,041.90 13,153,582.80
Total 295,151,372.38 305,468,505.38
Note: There is no due note unpaid at the year end.
23. Accounts payable
(1) Accounts payable
Item Closing balance Opening balance
Material payments 459,748,015.17 536,857,742.20
Project payments 227,092,621.70 207,388,636.82
Equipment payments 76,820,952.59 67,053,415.79
94 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Item Closing balance Opening balance
Others 3,605,642.97 3,031,889.21
Total 767,267,232.43 814,331,684.02
(2) Main accounts payable with age over 1 year
Closing Reason of unpaid or not
Name of company
balance carried forward
Panasonic Cold Machine System (Dalian) Co., Ltd 13,774,637.70 Payment is undue
Heilongjiang Longleng Technology Co., Ltd 9,413,290.00 Payment is undue
Xi’an Qitong New Energy Equipment Co., Ltd 7,987,764.20 Payment is undue
Haoxing Nengtou(Beijing) Assets management
7,039,659.99 Payment is undue
Co.,Ltd
Lixingkai (Beijing) Energy System Technology
6,136,305.82 Payment is undue
Co.,Ltd
Total 44,351,657.71 —
24. Contract liability
(1) Details
Item Closing balance Opening balance
Received in advance due from
295,100,657.10 142,098,781.00
unrealized revenue
Total 295,100,657.10 142,098,781.00
(2) Significant change on the book value
Item Change amount Change reason
According to the contract,
Received in advance due from
153,001,876.10 received the payment from the
unrealized revenue
client in advance
Total 153,001,876.10
25. Employee’s payable
(1) Category of employee’s payable
Item Opening Increase Decrease Closing
balance balance
Short-term employee’s
31,701,317.58 309,502,441.60 310,077,950.24 31,125,808.94
payable
Post-employment benefit
3,096,599.12 3,096,599.12
–defined contribution plan
Termination benefits 1,946,559.70 1,946,559.70
Other welfare due within 1
year
Total 31,701,317.58 314,545,600.42 315,121,109.06 31,125,808.94
(2) Short-term employee’s payables
Item Opening Increase Decrease Closing
balance balance
Salaries, bonus, allowance,
26,129,186.34 255,112,946.64 254,715,806.98 26,526,326.00
and subsidy
Welfare 4,142,390.78 11,741,484.19 12,803,855.98 3,080,018.99
Social insurance 16,021,212.08 16,004,766.79 16,445.29
95 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Item Opening Increase Decrease Closing
balance balance
Include: Medical insurance 13,611,773.88 13,596,913.68 14,860.20
Supplemental insurance
On-duty injury insurance 283,354.29 283,354.29
Maternity insurance 2,126,083.91 2,124,498.82 1,585.09
Housing funds 162,229.36 20,392,778.91 20,555,008.27
Labor union and training
1,267,511.10 4,085,044.22 3,849,536.66 1,503,018.66
expenses
Short-term leave with pay
Short term profit share plan
Others 2,148,975.56 2,148,975.56
Total 31,701,317.58 309,502,441.60 310,077,950.24 31,125,808.94
(3) Defined contribution plan
Item Opening balance Increase Decrease Closing balance
Pension 2,933,322.60 2,933,322.60
Unemployment insurance 163,276.52 163,276.52
Company annuity plan
Total 3,096,599.12 3,096,599.12
26. Tax payable
Item Closing balance Opening balance
Value-added tax 2,830,255.88 2,486,893.96
Enterprise income tax 3,114,706.06 2,246,427.46
Real estate tax 1,899,793.53 1,853,410.62
Land use tax 1,094,760.28 1,094,760.28
Individual income tax 216,213.81 244,461.02
Stamp duty 151,410.38 153,970.35
City maintenance and construction tax 238,887.83 60,130.79
Education surcharge 167,925.89 42,950.57
River toll fee 240.59 573.64
Safeguard fund for disables 440.00
Total 9,714,194.25 8,184,018.69
27. Other accounts payable
Item Closing balance Opening balance
Interest payable 1,839,166.81 6,396,385.83
Dividend payable 533,156.00 533,156.00
Other accounts payable 40,645,143.57 48,991,518.86
Total 43,017,466.38 55,921,060.69
27.1Interest payable
96 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Item Closing balance Opening balance
Interest on short term loan 1,703,750.01 6,260,969.04
Interest on corporate bond 135,416.80 135,416.79
Total 1,839,166.81 6,396,385.83
27.2Dividend payable
Item Closing balance Opening balance
Ordinary share dividend 533,156.00 533,156.00
Total 533,156.00 533,156.00
27.3Other accounts payable
(1) Other payables categorized by payments nature
Payments nature Closing balance Opening balance
Cash pledge and security deposit 8,518,729.05 9,620,594.19
Apply for reimbursement and unpaid 11,557,803.69 21,211,414.23
Cash from related parties 5,900,000.00
Receipts under custody 6,191,124.03 6,980,440.67
Others 14,377,486.80 5,279,069.77
Total 40,645,143.57 48,991,518.86
28. Non-current liabilities due within one year
Item Closing balance Opening balance
Bond payable due within one year 25,000,034.00
Long-term payable due within one year 12,157,092.41 14,174,643.42
Total 37,157,126.41 14,174,643.42
Note: The long-term payable due within one year is the financing lease payable of RMB
12,157,092.41.
29. Other current liabilities
Item Closing balance Opening balance
Notes payable endorsed not derecognized 121,572,682.35
Output Vat to be carried forward 30,601,263.95 18,472,841.53
Total 152,173,946.30 18,472,841.53
30. Long-term borrowing
(1) Category of long-term borrowing
Category Closing Balance Opening Balance
Guarantee loan 160,000,000.00 160,000,000.00
Total 160,000,000.00 160,000,000.00
Note: In year 2016, the Development Fund from China Development Bank gave support to the
company’s intelligent and green equipment of cold chain and service industry base project and
provided special fund to the company’s holding shareholder, Bingshan Group. The fund is 0.16
billion Yuan with 10year’s expiration at 1.2% rate. Once the fund arrived, Bingshan Group gave it to
the company at the same rate of 1.2% in lump sum. The above fund needed to be warranted by the
company. The guarantee seems to be given for the holding shareholder, but it is for the company
itself in fact.
31. Bonds payable
(1) Category of bonds payable
97 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Category Closing balance Opening balance
Exchangeable corporate bonds 25,000,034.00
Total 25,000,034.00
(2) The changes of bond
Issue
Interest Am
Bond Issue Bond Issue Opening d Closing
Par value at par t of Repay
name date term Amount balance this balance
value P/D
year
Exchange
able 176,000,00 2018.7. 3 176,000,000. 25,000,034.
corporate 0.00 30 years 00 00
bond
Total 176,000,00 176,000,000. 25,000,034.
- -
0.00 00 00
(3) Exchangeable corporate bond
Approved by the Shanghai Stock Exchange “Letter of No-objection to the Non-public Issuance of
Exchangeable Corporate Bonds of Dalian Refrigeration Co., Ltd.” ([2018] No. 125), the company
non-publicly issued 1.76 million number of exchangeable corporate bonds on July 30, 2018, at a par
value of 100Yuan, and raised a total of 176 million Yuan. The bond is based on simple annual
interest rate with a fixed interest rate of 1.3%. It is repayable once a year and pays interest once a
year. The relevant issuance costs are RMB 1,496,000.00.
The term of the bond swap is from the first trading day after the 6 months of issuance of the
exchangeable corporate bonds to the maturity date of the exchangeable corporate bonds, which is
from January 30, 2019 to July 2021. 29th. If the due date is on a statutory holiday or a public holiday,
it will be postponed to the next trading day. The initial exchange price is RMB18 Yuan per share.
Since January 30th, 2019, “18 DaLeng EB” goes into swap period, which can be swapped to A
Shares of Guotai Junan held by the company. Up to December 31st , 2019, total numbers of
swappable shares of “18 DaLeng EB” held is 8.388887 million shares, at swappable price of
RMB18Yuan per share, and the amount of bond repayment payable is RMB150,999,966.00Yuan.
The remaining balance of unpaid bond is RMB25,000,034.00Yuan and has been transferred to
noncurrent liability due within one year.
32. Long term accounts payable
Item Closing Balance Opening Balance
Long term accounts payable 14,622,463.75 397,771.84
Total 14,622,463.75 397,771.84
32.1Category by nature
Nature Closing Balance Opening Balance
Financial lease 2,656,962.34 397,771.84
Sale and leaseback 11,965,501.41
Total 14,622,463.75 397,771.84
33. Provision
Nature Closing Balance Opening Balance Reason
Open litigation 7,592,239.01 Contract disputes
Total 7,592,239.01
Note1: Yichang Sanxia Logistic Park Co.,Ltd (hereinafter referred to as “Yichang Logistic Park”)
sued Dalian Bingshan Group Engineering Co., Ltd.(hereinafter referred to as “Bingshan
Engineering”), a subsidiary of the Company, over a dispute on the quality of cold storage
construction, with the following claims: It ordered Bingshan Engineering to pay RMB 7,015,542.70
for installation, renovation and maintenance of cold storage, RMB 286,000.00 for appraisal, RMB
98 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
15,000.00 for guarantee insurance, RMB 100,000.00 for new maintenance and rectification, and to
bear RMB 3,413,681.30 as default damages (total RMB 10,830,224.00); litigation fees should be
borne by Bingshan Engineering. Bingshan Engineering brought a counterclaim: the judgment
countersued Yichang Logistics Park for the payment of 167,610.00 Yuan for installation and
48,921.00 Yuan for overdue interest (total 216,531.00 Yuan)
On December 30, 2020, The Wujiagang District People's Court of Yichang City, Hubei Province
made the judgment of first verdict of E 0503 Minchu No. 1782 (2019) in the early days of the
Republic of China that Bingshan Engineering should pay a total of RMB 7,171,726.51 compensation
to Yichang Logistics Park; Other litigation claims of Yichang Logistics Park were rejected; The total
principal and interest of the Bingshan Engineering amount due from Yichang Logistics Park is
199,767.19 yuan, which has been offset with the above compensation; other litigation claims of
Bingshan Engineering were rejected.
On January 15, 2021, Bingshan engineering appealed to the Intermediate People's Court of Hubei
Province during the appeal period after the first instance verdict, the trial was held on March 17,
2021. As of the date of this report, the case is unsentenced yet.
Note 2: Shandong Meitian Energy Technology Co.,Ltd (hereinafter referred to as “Shandong
Meitian”) sued Wuhan New World Refrigeration Engineering Co., Ltd..(hereinafter referred to as
“WuLeng Engineering”), over a dispute on the technology service contract with the following claims:
It ordered WuLeng Engineering to pay RMB 1,650,000.00 for service rendered, and RMB
100,000.00 for economic loss(in total RMB 1,750,000.00), Wuhan New World Refrigeration
Industry Co., Ltd. (hereinafter referred to as " Wuxin Refrigeration ") shall jointly bear the liability
for the above-mentioned arrears; The litigation costs shall be borne by Wuleng Engineering and
Wuxin Refrigeration. Wuleng Engineering proposed counterclaim: it orders to terminate the "Project
Cooperation Agreement"; Shandong Meitian returned the loan of RMB 350,000.00 and the interest
of RMB 37,663.55. The litigation costs shall be borne by Shandong Meitian.
On December 13, 2020, the people's court of high and new technology industry development zone,
Taian of Shandong province, made the judgment of first verdict of Lu 0991 Minchu No. 954 (2020),
that Wuleng Engineering should pay a total of RMB 1.65million for service fee and economic loss.
Economic loss should be based on RMB 1.65million of service fee, plus interest which is worked out
based on the interbank offer rate in China market published by the National wide Interbank Offering
Center until the date of actual payment. Wuxin Refrigeration is jointly liable for the above amount.
Other claims of Shandong Meitian have been rejected; Rejected the counterclaim of Wuleng
Engineering.
On December 21, 2020, Wuleng Engineering appealed to the Intermediate People's Court of Taian
Shandong Province during the appeal period after the first instance verdict, as of the date of this
report, the trial is not held yet.
34. Deferred income
(1) Category of deferred income
Item Opening Increase Decrease Closing Formation
Balance Balance Basis
Government subsidy 99,154,666.29 14,818,011.08 9,515,108.51 104,457,568.86
Sale &l ease back
2,872.23 2,872.23
contract
Total 99,157,538.52 14,818,011.08 9,517,980.74 104,457,568.86 —
(2) Government subsidy
Into
The value
non- Related
offset cost
Government Opening operat Into other Closing with
Increase and
subsidy item Balance ing income Balance asset/
expense
incom income
this year
e
99 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Into
The value
non- Related
offset cost
Government Opening operat Into other Closing with
Increase and
subsidy item Balance ing income Balance asset/
expense
incom income
this year
e
Subsidy fund for
highly effective 1,497,604.00 1,449,191.35 48,412.65
Asset
heat pump and related
related system
Contribution to
subsidiary 41,218,000.00 1,114,000.00 40,104,000.00
Asset
company related
relocation
Application of
NH3 and CO2 Asset
instead of R22 14,477,971.01 3,721,546.58 1,801,167.11 16,398,350.48
Related/
screw refrigerating Income
machine combined related
condensing unit
Compressor IC 4,279,196.37 372,066.38 3,907,129.99
Asset
system related
Ultrasonic Asset
intelligent defrost 4,010,844.42 30,000.00 264,833.52 3,716,010.90 related/
technology Income
Eco Compressor 25,083,171.79 2,553,850.15 22,529,321.64
Asset
project related
R290 replacement
of R22 large 4,877,498.70 8,129,164.50 13,006,663.20
Asset
industrial screw related
unit
R290 replacement
of R22 industrial 1,780,380.00 2,967,300.00 4,747,680.00
Asset
double stage screw related
unit
Model innovation 1,930,000.00 1,930,000.00
Asset
solution based on related
100 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Into
The value
non- Related
offset cost
Government Opening operat Into other Closing with
Increase and
subsidy item Balance ing income Balance asset/
expense
incom income
this year
e
industrial Internet
platform
Total 99,154,666.29 14,818,011.08 - 3,074,000.00 6,441,108.51 104,457,568.86 -
Note: Asset related grant shall be offset the cost or expense within the asset’s useful life; income
related grant shall be booked into other income or offset cost or expense if it is relevant to daily
activity, otherwise it shall be booked into non-operating expense.
26. Share capital
Increase/decrease（+、-）
Opening New Closing
Item Share Transfer from
balance share others Subtotal balance
dividend capital reserve
issued
843,212,507.
843,212,507.00
00
27. Capital reserves
Items Opening Balance Increase Decrease Closing Balance
Share premium 659,622,044.20 659,622,044.20
Other capital reserves 67,146,423.80 67,146,423.80
Total 726,768,468.00 726,768,468.00
101 / 141
BINGSHAN REFRIGERATION & HEAT TRANSFER TECHNOLOGIES CO., LTD
Notes to financial statements for the year ended December 31, 2020
(The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
28. Other comprehensive income
Current year
Opening Closing
Items Amount for the Less：Previously recognized Less ： After-tax After-tax attribute
Balance Balance
period before in profit or loss into other income attribute to the to minority
income tax comprehensive income tax parent company shareholder
I.Later can’t reclassified into profit
and loss of other comprehensive
income
Re-measured the change in the
defined benefit plan
Other comprehensive income that
cannot be transferred to profit or loss
under the equity method
II. Later reclassified into profit and 2,501,459.77 2,501,459.77
loss of other comprehensive income
Other comprehensive income that can
be transferred to profit or loss under 2,501,459.77 2,501,459.77
the equity method
Changes in fair value recognized in
gains and losses of the
available-for-sale financial assets
Held-to-maturity investments are
reclassified as gains and losses on
available-for-sale financial assets
Effective portion of cash flow hedge
gains and losses
Foreign currency financial statement
conversion difference
Other comprehensive income total 2,501,459.77 2,501,459.77
102 / 141
29. Special Reserve
Opening Closing
Items Increase Decrease
Balance Balance
Safety production cost 3,239,077.20 3,239,077.20
Total 3,239,077.20 3,239,077.20
30. Surplus reserves
Item Opening Closing
Increase Decrease
Balance Balance
Statutory surplus reserve 349,664,058.11 6,392,691.96 356,056,750.07
Discretionary surplus reserve 419,059,754.42 30,409,270.84 449,469,025.26
Total 768,723,812.53 36,801,962.80 805,525,775.33
Note: The Company made profit distribution within the reporting period. According to the
2019annual meeting, 20% of net profit in the 2019 fiscal annual report is provided for discretionary
surplus reserve of 30,409,270.84 Yuan. In the meanwhile, 10% of net profit of parent company is
provided for statutory surplus reserve of 6,392,691.96Yuan.
31. Undistributed profits
Item Current year Last year
Closing balance of last year 1,038,358,782.59 764,859,288.45
Add: Adjustments to the opening balance of
274,180,778.57
undistributed profits
Including: additional retrospective adjustments
274,180,778.57
according to the new accounting standards
Change on accounting policy
Correction of prior period significant errors
Change on combination scope under same control
Other factors
Opening balance of current year 1,038,358,782.59 1,039,040,067.02
Add: net profit attributable to shareholders of parent
21,341,133.39 89,112,113.43
company in the year
Less: Provision for statutory surplus reserves 6,392,691.96 15,204,635.42
Provision for any surplus reserves 30,409,270.84 32,428,137.09
Provision of general risk
Dividends payable for common shares 25,296,375.21 42,160,625.35
Common stock dividends converted to equity
Extract employee rewards and welfare funds
Closing balance of current year 997,601,577.97 1,038,358,782.59
32. Operating revenue and cost
(1) Details
Items Current year Last year
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from
1,680,314,480.42 1,401,374,951.04 1,786,183,886.17 1,483,700,827.17
principle operation
Revenue from other
46,953,454.73 31,149,158.87 45,667,394.53 33,860,621.34
operation
Total 1,727,267,935.15 1,432,524,109.91 1,831,851,280.70 1,517,561,448.51
(2) Main revenue from contract details
103 / 141
Items Last year
Classified at products type 1,680,314,480.42
Manufacture products 1,347,335,824.84
Project installation 321,545,409.42
Other products and service 11,433,246.16
Classified at geography location 1,680,314,480.42
domestic 1,588,511,646.25
overseas 91,802,834.17
33. Taxes and surcharges
Items Current year Last year
City construction tax 1,611,470.71 2,035,010.82
Education surcharge 1,147,208.51 1,391,088.76
Property tax 7,337,286.22 7,382,947.12
Land use tax 4,068,191.93 4,379,516.26
Vehicle and vessel tax 1,253,726.37 1,455,247.06
Stamp duty 31,694.48 28,704.48
Others 6,534.92 317,444.08
Total 15,456,113.14 16,989,958.58
34. Selling expenses
Items Current year Last year
Employee benefit 40,196,358.86 48,336,468.87
Official business expense 14,256,723.26 16,622,496.40
Travel expense 10,998,391.78 15,737,758.36
Business entertaining expense 9,966,831.47 13,627,445.28
Maintenance and repair expense 5,527,611.04 10,381,512.83
Advertisement and bids expense 2,139,949.39 2,325,077.63
Depreciation expense 227,836.85 285,897.02
Transportation expense 23,216,116.08
Other expense 426,774.25 655,961.24
Total 83,740,476.90 131,188,733.71
35. Administrative expenses
Items Current year Last year
Employee benefit 101,631,233.81 115,554,829.24
Official expense 17,274,897.46 20,684,266.00
Depreciation expense 10,423,498.19 11,884,135.92
Long-term assets amortization 7,508,381.76 7,236,053.16
Maintenance and repair expense 6,754,128.80 4,942,354.19
Design consultant and test service expense 5,024,778.03 4,051,894.64
Safety production cost 3,239,077.20 3,893,886.44
Travel expense 2,885,657.48 7,702,176.81
Business entertaining expense 2,335,952.36 4,065,160.99
Insurance expense 764,446.72 987,660.67
Transportation expense 702,607.23 760,077.95
104 / 141
Items Current year Last year
Advertisement expense 364,933.57 671,697.54
Other taxes and fee 83,529.05 428,156.75
Other expense 1,302,248.87 2,874,865.23
Total 160,295,370.53 185,737,215.53
36. Technology development expense
Items Current year Last year
Employee benefit 38,877,014.74 39,024,662.74
Depreciation and amortization expense 4,524,355.03 4,662,120.15
Raw material 4,479,120.55 5,331,768.75
Other expense 1,277,766.46 1,630,966.53
Total 49,158,256.78 50,649,518.17
37. Financial expenses
Items Current year Last year
Interest expenses 22,795,380.51 17,999,780.21
Less: interest income 2,435,386.06 2,110,293.61
Add: exchange loss 3,199,444.76 108,452.24
Add: others expenditure 2,919,870.16 2,471,151.87
Total 26,479,309.37 18,469,090.71
38. Other income
Items Current year Last year
Government subsidy 18,938,565.95 5,120,764.73
Personal income tax handling fee refund 688,552.44 2,228.83
Job stability subsidy 477,452.00
Total 20,104,570.39 5,122,993.56
39. Investment income
Items Current year Last year
Long-term equity investment gain under equity method 79,024,253.68 140,574,045.58
Gain from disposing of long-term equity investment 12,859,589.96
Gain from holding of tradable financial assets
Gain from disposing of tradable financial assets
Gain from FV remeasurement of the remaining shares after
losing control
Gain from holding of other noncurrent financial assets 5,372,826.87 5,709,924.48
Gain from disposal of other noncurrent financial assets 7,180,485.22 22,482,217.16
Total 104,437,155.73 168,766,187.22
40. Gain on fair value change
Source of gain on FV change Current year Last year
Other noncurrent financial assets -14,797,607.68 49,800,725.36
Total -14,797,607.68 49,800,725.36
41. Credit impairment loss (loss listed as“-“)
105 / 141
Items Current year Last year
Credit impairment loss on notes receivable 1,310,734.78 13,283,482.58
Credit impairment loss on receivable -20,792,681.30 -83,869,016.33
Credit impairment loss on other receivable -6,016,822.24 -56,597.35
Credit impairment loss on long term receivable -9,218,793.44
Total -34,717,562.20 -70,642,131.10
42. Assets impairment losses (loss listed as “-“)
Items Current year Last year
Loss of contract asset impairment -5,065,258.60
Loss on impairment of inventory and cost to fulfill
-8,411,139.41 -1,200,000.00
the contract obligation
Total -13,476,398.01 -1,200,000.00
43. Gain on assets disposal (loss listed as “-“)
Amounts recognized into
Item Current year Last year current non-recurring
profit or loss
Gain on non-current assets
-169,550.05 1,194,791.09 -169,550.05
disposal
Including: gain on non-current
assets disposal not classified as -169,550.05 1,194,791.09 -169,550.05
held for sale
Including: gain on fixed assets
-169,550.05 1,194,791.09 -169,550.05
disposal
Total -169,550.05 1,194,791.09 -169,550.05
44. Non-operating income
（1） Non-operating income list
Amounts recognized
into non-recurring
Item Current year Last year
profit or loss for the
year
Gain on debts restructuring 681,549.89 1,999,241.94 681,549.89
Other items 729,839.86 690,637.24 729,839.86
Total 1,411,389.75 2,689,879.18 1,411,389.75
45. Non-operating expenses
Amounts recognized
into non-recurring
Item Current year Last year
profit or loss for the
year
Non-current assets scrap loss 238,773.51 62,659.79 238,773.51
Outward donation 60,000.00 60,000.00 60,000.00
Expected loss for open litigation 7,592,239.01 7,592,239.01
Others 250,241.11 149,087.81 250,241.11
Total 8,141,253.63 271,747.60 8,141,253.63
46. Income tax expenses
(1) Income tax expenses
Items Current year Last year
106 / 141
Items Current year Last year
Current income tax expenses 7,201,935.68 5,604,379.42
Deferred income tax expenses -15,786,702.19 -25,013,037.25
Total -8,584,766.51 -19,408,657.83
(2) Adjustment process of accounting profit and income tax expense
Items Current year
Consolidated total profit this year 14,265,042.82
Income tax expenses at applicable tax rate 2,139,756.42
Effect on subsidiary applied to different tax rate -2,426,944.00
Effect on prior period income tax -515,828.39
Effect on non-taxable income -12,639,983.00
Effect on non-deductible cost, expense and loss 3,954,516.63
Effect on use of deductible loss from unrecognized deferred tax
-1,524,914.84
assets in the prior period
Effect on temporary difference or deductible loss from
7,819,230.19
unrecognized deferred tax assets this year
Effect on deduction/ exemption of income tax -951,046.42
R&D expenditure accelerated deduction -4,439,553.10
Income tax expense -8,584,766.51
47. Other comprehensive income
Refer to the note “VI.37 Other comprehensive income” for details.
48. Notes to cash flow statement
(1) Cash receipt/payment of other operating/investing/financing activities
1) Other cash received relating to operating activities
Items Current year Last year
Government grants 24,996,436.54 7,327,679.84
Received travel expense refund 4,828,777.61 5,606,440.47
Deposit given back 36,950,909.92 30,366,842.02
Receivable from relate party 11,000,000.00 5,900,000.00
Interest income 2,637,279.19 1,812,932.00
rd 819,999.99
Receivable from the 3 party 177,570.52
Others 1,525,094.13 2,253,151.29
Total 82,116,067.91 54,087,045.61
2) Other cash paid relating to operating activities
Items Current year Last year
Business travel borrowing 7,009,973.81 10,957,760.56
Deposit paid 47,940,846.54 29,999,396.54
Expenditure 74,311,911.83 99,532,057.81
Unsettled AR/AP among related party 11,000,000.00
Bank handling charges 2,375,268.90 2,259,211.67
Others 4,342,577.27 1,217,640.72
Total 146,980,578.35 143,966,067.30
107 / 141
3) Others cash received relating to financing activities
Items Current year Last year
Collection of guarantee money at the year end 30,591,791.66 38,323,050.64
Sale leaseback and financial lease 25,898,027.71
Total 56,489,819.37 38,323,050.64
4) Others cash paid relating to financing activities
Items Current year Last year
Interests on discount of bill acceptance 136,500.00
Payment of guarantee money 56,369,665.56 30,591,791.66
Sale& leaseback and financial lease 21,827,295.59 3,270,174.66
Repurchase of restricted stock 47,566,389.36
Note financing is due and is paid 2,412,480.00
Total 78,196,961.15 83,977,335.68
(2) Supplementary information of consolidated cash flow statement
Items Current year Last year
1. Adjusting net profit into cash flows of operating
activities:
Net profit 22,849,809.33 86,124,671.03
Add: Provision for impairment of assets 13,476,398.01 1,200,000.00
Provision for impairment of credit 34,717,562.20 70,642,131.10
Depreciation of fixed assets, Amortization of mineral
76,389,416.86 66,581,569.79
resources, and biological assets
Amortization of intangible assets 6,731,291.97 6,504,678.19
Amortization of long-term deferred expenses 1,986,307.40 1,992,596.64
Losses on disposal of fixed assets, intangible assets, and
169,550.05 -1,194,791.09
long-term assets (income listed with”-”)
Losses on write-off of fixed assets (income listed with”-”) 238,773.51 62,659.79
Change of fair value profit or loss 14,797,607.68 -49,800,725.36
Financial expense (income listed with”-”) 22,795,380.51 17,999,780.21
Investment loss (income listed with”-”) -104,437,155.73 -168,766,187.22
Decrease of deferred tax assets(increase listed with”-”) -6,581,861.03 -14,273,801.02
Increase of deferred tax liabilities(decrease listed with”-”) -9,204,841.16 -10,739,236.23
Decrease of inventories (increase listed with”-”) -180,341,865.83 -90,457,284.61
Decrease of operating receivables (increase listed with”-”) -61,894,148.27 48,592,703.91
Increase of operating payables (decrease listed
46,478,371.32
with”-”) 155,165,347.05
Others 1,747,935.36
Net cash flows arising from operating activities -13,142,427.45 12,695,071.81
2. Significant investment and financing activities
unrelated to cash income and expenses
Liabilities transferred to capital
Convertible bonds within 1 year 25,000,034.00
Financing leased fixed assets
108 / 141
Items Current year Last year
3. Net increase (decrease) of cash and cash equivalent
Closing balance of cash 314,978,460.49 301,527,354.56
Less: Opening balance of cash 301,527,354.56 304,703,434.47
Add: Closing balance of cash equivalent
Less: Opening balance of cash equivalent
Net increase of cash and cash equivalent 13,451,105.93 -3,176,079.91
(3) Cash and cash equivalents
Items Current year Last year
Cash 314,978,460.49 301,527,354.56
Including: Cash on hand 154,668.54 92,096.63
Bank deposit used for paying at any moment 314,823,791.95 301,435,257.93
Other monetary fund for paying at any moment
Deposit fund in central bank available for payment
Cash equivalent
Including: bonds investment with maturity in 3 months
Closing balance of cash and cash equivalents 314,978,460.49 301,527,354.56
Cash and cash equivalents restricted in the parent
company or subsidiary
58. The assets with the ownership or use right restricted
Items Current year Reasons
Monetary fund 58,467,271.18 Guarantee money
Notes Receivable 12,175,402.47 Pledge
Note: The bank account of Wuhan New World Refrigeration Industrial Co., Ltd is frozen due to
litigations, the amount is 2million Yuan. Wuhan Lanning Energy Technology Co., Ltd’s bank
account is frozen due to litigations, the amount is 97,600 Yuan.
Dalian Niweisi LengNuan Techonoligy Co., Ltd. pledged the bank acceptance note to China
Merchants bank Dalian Branch as guarantee for issuing the commercial acceptance note.
Dalian Xinminghua Electrical Technology Co., Ltd. pledged the bank acceptance note to China
Merchants bank Dalian Jinpu Branch as guarantee for issuing the commercial acceptance note.
Dalian Bingshan Air-conditioning Equipment Co., Ltd. pledged the bank acceptance note to ICBC
bank Dalian DDZ Branch as guarantee for issuing the commercial acceptance note.
59. Monetary category of foreign currency
(1) Monetary category of foreign currency
Closing Balance Exchange Closing Balance
Item
(foreign currency) Rate (RMB)
Cash 18,505,213.99
Including：USD 2,420,058.90 6.5249 15,790,643.22
GBP 7.46 8.8903 66.32
JPY 42,926,568.00 0.063236 2,714,504.45
Accounts receivable 38,233,835.37
Including: USD 5,324,132.44 6.5249 34,739,431.77
GBP 149,782.86 8.8903 1,331,614.56
JPY 34,201,863.00 0.063236 2,162,789.04
Accounts payable 9,227,895.48
109 / 141
Closing Balance Exchange Closing Balance
Item
(foreign currency) Rate (RMB)
Including: USD 1,004,324.11 6.5249 6,553,114.36
Euro 18,447.50 8.0250 148,041.19
GBP
JPY 39,957,301.47 0.063236 2,526,739.93
60. Government Grants
(1) Basic information
Amount
recognized in
Category Amount Disclosure
current profit and
loss
Deferred
Efficiency pump and its supporting
7,800,000.00 income/cost of 1,449,191.35
systems
sales/expense
Deferred
Relocation compensation 42,332,000.00 income/cost of 1,114,000.00
sales/expense
Deferred
Application of combined compression
21,273,678.04 income/cost of 1,801,167.11
NH3&Co2 replace R22
sales/expense
Deferred
Refrigeration Compressor Intelligent
5,000,000.00 income/cost of 372,066.38
Manufacturing System Fund
sales/expense
Deferred
Ultrasonic defrosting technology 9,841,800.00 income/cost of 294,833.52
sales/expense
Environmental protection and energy
Deferred
saving refrigeration and air
31,000,000.00 income/cost of 2,553,850.15
conditioning compressor technology
sales/expense
industrialization project
R290 replace R22 13,006,663.20 Deferred income
R290 replace R22 twin stage screw
4,747,680.00 Deferred income
sets
VAT refund 349,556.38 Other Income 349,556.38
High-tech enterprise recognition
176,000.00 Other Income 176,000.00
subsidy
Model innovation solution provider
based on industrial Internet platform -
5,000,000.00 Other Income 5,000,000.00
Dalian Bureau of Industry and
Information Technology
Integration of large and small
9,093,037.41 Other Income 9,093,037.41
enterprises" project
Vocational skills training subsidies 731,457.00 Other Income 731,457.00
Land tax and property tax refund 270,001.67 Other Income 270,001.67
Export credit insurance premium
300,000.00 Other Income 300,000.00
support fund
International market support fund for
329,500.00 Other Income 329,500.00
medium and small entity
Technology plan subsidy from Jinpu
1,000,000.00 Other Income 1,000,000.00
New Area
Special fund for pilot enterprises of
273,000.00 Other Income 273,000.00
the standardization of Dalian's
110 / 141
Amount
recognized in
Category Amount Disclosure
current profit and
loss
integration of industrialization and
modernization management system
Technology reward of 2019-Dalian
50,000.00 Other Income 50,000.00
Science Technology Bureau
Key R&D project of 2018-Dalian
191,400.00 Other Income 191,400.00
Science Technology Bureau
Others 30,613.49 Other Income 30,613.49
Total 152,796,387.19 - 25,379,674.46
VII. Change of Consolidation Scope
There are no changes in scope of consolidation
VIII. Interest in other entity
1. Equity of subsidiaries
(1) Organization structure of group company
Main Shareholding
Registered Business (%) Obtaining
Name of subsidiaries business
address nature method
address Direct Indirect
Dalian Bingshan Group
Dalian Dalian Installation 100 Establish
Engineering Co., Ltd.
Dalian Bingshan Group
Dalian Dalian Trading 100 Establish
Sales Co., Ltd.
Dalian Bingshan
Air-conditioning Equipment Dalian Dalian Manufacturing 70 Establish
Co., Ltd.
Dalian Bingshan JiaDe
Dalian Dalian Manufacturing 100 Establish
Automation Co., Ltd.
Dalian Bingshan Lingshe
Quick Freezing Equipment Dalian Dalian Manufacturing 100 Establish
Co., Ltd.
Wuhan New World
Refrigeration Industrial Co., Wuhan Wuhan Manufacturing 100 Acquisition
Ltd.
Bingshan Technical Service
Dalian Dalian Services 100 Establish
（Dalian） Co.,Ltd.
Dalian Xinminghua
Electrical Technology Co., Dalian Dalian Electronic 100 Acquisition
Ltd
Dalian Niweisi LengNuan
Dalian Dalian Manufacturing 55 Acquisition
Technology Co., Ltd.
Dalian Bingshan
International Trading Dalian Dalian Service 100 Acquisition
Company
Wuhan New World
Air-conditioning
Wuhan Wuhan Installation 100 Establish
Refrigeration Engineering
Co., Ltd
Wuhan Lanning Energy
Wuhan Wuhan Trading 54.55 Acquisition
Technology Co., Ltd.
Ningbo Bingshan
Air-conditioning
Ningbo Ningbo Installation 51 Establish
Refrigeration Engineering
Co., Ltd
111 / 141
Main Registered Business Shareholding Obtaining
Name of subsidiaries
business address nature (%) method
Chengdu Bingshan
Refrigeration Engineering Chengdu Chengdu Services 51 Establish
Co., Ltd.
1) All the proportion of shareholding in subsidiaries were the same with voting right.
2) The company held over 50% voting right in subsidiaries and could control these subsidiaries
with over 50% voting right.
(2) There are no significant non-subsidiaries.
2. Equity in joint venture arrangement or associated enterprise
（1） The important affiliated companies
Shareholding (%)
Main
Name of joint ventures or Registered Business Accounting
business
affiliated companies address nature methods
address
Direct Indirect
Panasonic Cold-chain (Dalian) Equity
Dalian Dalian Manufacturing 40
Co., Ltd method
Panasonic Refrigeration Equity
Dalian Dalian Manufacturing 20
(Dalian) Co., Ltd. method
Panasonic Compressor Equity
Dalian Dalian Manufacturing 40
(Dalian) Co., Ltd method
Jiangsu Jingxue Energy Saving Equity
Changzhou Changzhou Manufacturing 29.212
Technology Co., Ltd. method
Dalian Bingshan Metal Equity
Dalian Dalian Manufacturing 49.00
Technology Co., Ltd. method
The company assumes the affiliated as significant party either when the investment income from
investee presents 10% of the parent’s net profit or the proportion of shareholding of the investee’s
net asset represents 10% of the parent’s shareholder equity.
1) The company has the same percentage of shareholding and voting right in joint-venture or
affiliated company.
2) The company doesn’t have affiliated company which has significant influence although being
held less than 20% voting rights.
3) The company doesn’t have joint venture or affiliated companies which have no significant
influence although being held 20% or more voting rights.
112 / 141
（2） The key financial information of affiliated companies
Closing balance/Current year
Items Panasonic Jiangsu Jingxue Energy
Panasonic Cold-chain Panasonic Compressor Dalian Bingshan Metal
Refrigeration (Dalian) Saving Technology Co.,
(Dalian) Co., Ltd (Dalian) Co., Ltd Technology Co., Ltd.
Co., Ltd. Ltd.
Current assets 672,990,071.25 1,487,134,035.54 1,245,700,871.26 858,059,356.79 332,989,325.80
Including: Cash and cash
61,133,142.17 55,444,887.64 146,464,797.70 163,037,732.91 191,576,206.68
equivalents
Non-current assets 15,351,860.86 238,629,720.75 309,811,760.93 192,469,083.17 44,431,510.18
Total assets 688,341,932.11 1,725,763,756.29 1,555,512,632.19 1,050,528,439.96 377,420,835.98
Current liabilities 498,644,666.31 1,048,933,029.30 366,066,971.54 478,133,992.64 63,065,326.29
Non-current liabilities 18,343,806.70 13,138,693.27
Total liabilities 498,644,666.31 1,048,933,029.30 384,410,778.25 491,272,685.91 63,065,326.29
Minority interests 375,245.30
Equity to the parent company 189,697,265.80 676,830,726.99 1,171,101,853.94 558,880,508.75 314,355,509.69
Net assets calculated
according to the shareholding 37,939,453.16 270,732,290.80 468,440,741.58 163,260,174.22 154,034,199.75
proportions
Adjusting events
—Goodwill 4,440,630.89 39,948,654.75 19,269,770.94
—Unrealized profits of
insider trading
--Others -519,397.90 -639,508.39 -2,621,843.60 -145,424.54
Book value of equity
investment of affiliated 37,420,055.26 274,533,413.30 465,818,897.98 203,208,828.97 173,158,546.15
companies
Fair value of equity
investment with public offer
113 / 141
Closing balance/Current year
Items Panasonic Jiangsu Jingxue Energy
Panasonic Cold-chain Panasonic Compressor Dalian Bingshan Metal
Refrigeration (Dalian) Saving Technology Co.,
(Dalian) Co., Ltd (Dalian) Co., Ltd Technology Co., Ltd.
Co., Ltd. Ltd.
Operating income 684,261,257.97 1,393,251,936.08 905,805,839.02 772,785,891.15 405,008,117.04
Financial expense 2,552,851.48 26,378,537.05 -1,428,218.52 1,660,123.13 -2,347,078.64
Income tax expense 4,652,732.78 -497,086.07 10,206,548.28 8,171,271.84 9,841,964.14
Net profit 32,462,369.03 19,984,637.30 81,932,612.51 60,206,578.50 59,356,953.86
Net profit of discontinuing
operation
Other comprehensive income
Total comprehensive income 32,462,369.03 19,984,637.30 81,932,612.51 60,206,578.50 59,356,953.86
The current dividends
2,528,392.05 - 36,026,000.00 - 28,510,920.84
received from joint ventures
(Continued)
Opening balance/Current year
Items Panasonic Jiangsu Jingxue Energy
Panasonic Cold-chain Panasonic Compressor Dalian Bingshan Metal
Refrigeration (Dalian) Saving Technology Co.,
(Dalian) Co., Ltd (Dalian) Co., Ltd Technology Co., Ltd.
Co., Ltd. Ltd.
Current assets 557,942,218.32 1,296,079,385.62 1,273,294,847.52 799,706,878.07 337,202,163.28
Including: Cash and cash
42,632,933.26 22,651,460.05 221,352,547.39 146,071,549.56 213,057,016.14
equivalents
Non-current assets 15,699,863.59 249,796,436.32 321,031,252.89 182,461,279.39 45,671,841.16
Total assets 573,642,081.91 1,545,875,821.94 1,594,326,100.41 982,168,157.46 382,874,004.44
114 / 141
Opening balance/Current year
Items Panasonic Jiangsu Jingxue Energy
Panasonic Cold-chain Panasonic Compressor Dalian Bingshan Metal
Refrigeration (Dalian) Saving Technology Co.,
(Dalian) Co., Ltd (Dalian) Co., Ltd Technology Co., Ltd.
Co., Ltd. Ltd.
Current liabilities 401,357,232.46 880,473,983.12 407,776,858.98 471,408,946.96 69,393,111.10
Non-current liabilities 110,000.00 12,521,123.87
Total liabilities 401,357,232.46 880,473,983.12 407,886,858.98 483,930,070.83 69,393,111.10
Minority interests 370,905.17
Equity to the parent company 172,284,849.45 665,401,838.82 1,186,439,241.43 497,867,181.46 313,480,893.34
Net assets calculated
according to the shareholding 34,456,969.89 266,160,735.53 474,575,696.57 145,436,961.05 153,605,637.74
proportions
Adjusting events
—Goodwill 4,440,630.89 39,948,654.75 19,269,770.94
—Unrealized profits of
insider trading
--Others -481,598.48 -3,422,299.65 -2,882,081.25 144,725.49
Book value of equity
investment of affiliated 33,975,371.41 267,179,066.77 471,693,615.32 185,385,615.80 172,730,683.20
companies
Fair value of equity
investment with public offer
Operating income 650,687,248.42 1,524,559,182.20 1,208,925,882.37 653,705,124.18 419,769,831.96
Financial expense 1,758,341.64 23,241,958.42 -3,664,678.76 2,402,378.98 -3,252,083.01
Income tax expense 5,493,447.71 14,551,916.37 11,426,137.07 9,479,432.67 9,933,014.44
Net profit 30,099,905.36 106,946,864.14 90,065,039.00 63,564,805.54 59,071,627.15
Net profit of discontinuing
115 / 141
Opening balance/Current year
Items Panasonic Jiangsu Jingxue Energy
Panasonic Cold-chain Panasonic Compressor Dalian Bingshan Metal
Refrigeration (Dalian) Saving Technology Co.,
(Dalian) Co., Ltd (Dalian) Co., Ltd Technology Co., Ltd.
Co., Ltd. Ltd.
operation
Other comprehensive income
Total comprehensive income 30,099,905.36 106,946,864.14 90,065,039.00 63,564,805.54 59,071,627.15
The current dividends
2,284,000.00 4,400,000.00 45,350,000.00 2,921,200.00 29,883,772.81
received from joint ventures
116 / 141
（3） Summary financial information of insignificant affiliated companies
Items Current year Last year
Affiliated company
Total book value of investment of affiliated companies 438,741,587.30 525,950,379.30
The total of following items according to the shareholding
proportions
Net profit -10,023,106.52 19,145,042.47
Other comprehensive income
Total comprehensive income -10,023,106.52 19,145,042.47
（4） Significant restrictions of the ability of affiliated companies transferring funds to
the company.
No.
（5） Excessive loss of affiliated companies.
No.
（6） Contingency related to joint venture or affiliated company need to be disclosed.
No.
IX. Risk Related to Financial Instruments
The main financial instruments held by the group company are monetary fund, noted receivable,
accounts receivable, accounts payable, available-for-sale financial asset and short term loan. The
detailed explanation is referred to the note No.VI. The related risks of these financial instruments
and the risk management policy conducted to reduce these risks by the group company are
introduced as below. The Group management conducts to manage and monitor these risks exposure
and control these risks under certain risk level.
1. Objectives and policies of each risk management
The objectives of risk management conducted by the group company are to reach the balance
between risk and profit return by reducing the negative influence to operating performance to the
minimum level as well as maximizing the shareholders’ and other investors’ profits. Based on these
objectives, the basic risk management policy is to recognize and analyze all sorts of risk that the
group company faced with, to set up the proper risk tolerance bottom line conducting risk
management, as well as to monitor these risks in a timely and effective manner, and to ensure these
risks under the limit level.
(1) Market risk
1) Exchange rate risk
Most of the company’s business is located in China, and settled with RMB. But the company defined
exchange rate risk of assets, liabilities dominated in foreign currency and future transaction
dominated in foreign currency (mainly including USD, JPY, HKD and GBP). The financial
department of the company monitors the company’s foreign currency transaction and the scale of
foreign assets and liabilities, and decreases exchange rate risk. During the current year the company
did not agree any forward foreign exchange contract or currency swap contract .As at 31st December
2020, the company’s assets and liabilities dominated in foreign currency are listed in RMB as
following：
Items Closing Balance Opening balance
Monetary fund-USD 15,790,643.22 16,719,234.66
Monetary fund-JPY 2,714,504.45 1,142,608.46
Monetary fund-EURO 29,112.74
Monetary fund-GBP 66.32 385,286.46
Receivable- GBP 1,331,614.56 1,281,698.98
Receivable -USD 34,739,431.77 43,923,973.48
Receivable - EURO 57,832.75
Receivable -JPY 2,162,789.04 1,833,735.72
117 / 141
Items Closing Balance Opening balance
Payables -USD 6,553,114.36 5,245,528.61
Payables - EURO 148,041.19 10,394.62
Payables -JPY 2,526,739.93 2,807,578.63
Payables - GBP 341,063.39
The Company paid close attention to the effect on FX risk.
2) Interest rate risk
The interest risk of the Group incurred from bank loan, risk of a floating interest rate of financial
liabilities that lead to the company facing cash flow interest rate risk, financial liabilities with a fixed
interest rate lead to the company facing cash flow interest rate risk. The company determined the
proportion of fixed interest rate and floating interest rate according the current market circumstance.
The company and Dalian Bingshan Group Co., Ltd borrowed long-term loan RMB 160,000,000.00
with fixed interest rate.
The financial department of the company continuously monitors the interest rates level, and the
management would make some adjustment to lower the interest rate risk according to the latest
market situation. Climbing interest rate will increase the cost of newly increased interest-bearing
liability and interest expense for unsettled interest-bearing liability at floating rate and have adverse
effect on the business performance.
The sensitive analysis：
As at 31st December 2020, base on the assumption of interest rate change of 50 BP, the company’s
net profit of current year will increase or decrease1.5361 million Yuan.
3) Price risk
The Company sells financial asset measured at FV products according to the market price, so there
will be effect on the price variance until December 31,2020.
(2) Credit risk
The credit risk of the company comes from monetary fund, notes receivable, accounts receivable,
and other accounts receivable etc. The management made credit policies and monitored changes of
this credit exposure.
The company's monetary fund was in bank with higher credit rating, so there was no significant
credit risk, nor significant losses due to the default of other entity. Upper limit policy is adopted to
avoid any credit risk from financial institution.
The company made relevant policy to control credit risk exposure from receivable, other receivable
and notes receivable. The company assesses the client’s credit background according to the client’s
financial performance, possibility of obtaining guarantee from the 3rd party, credit record and other
factors such as current market. The company will periodically monitor the credit situation of the
client and will take measures such as prompt letter, shorten credit period or cancel the credit to
ensure the overall credit risk within the controllable scope.
As at 31st December 2020, the top five customers of receivable accounts balance are
132,447,464.07Yuan.
(3) Liquidity risk
Liquidity risk was referred to the risk of shortage of funds incurred when the enterprise fulfill the
obligation of settlement by cash or other financial assets. The way to manage the liquidity risk is to
ensure enough fund available to fulfill the liability by due date in prevention from unacceptable loss
of or reputation damage to the Company. The Company periodically analyze the liability structure
and expiry date and the financial department of the company continued to monitors the short term or
long-term capital needs to ensure maintain plenty of cash flow. And the same time they also monitor
the condition of bank loan agreements and obtain commitments from banks to reduce liquidity risks.
The fund mainly comes from bank loan. By December 31st, 2020, the credit limit still available is
429.96 million Yuan and short-term credit limit available is 429.96 million Yuan.
As at 31st December 2020, the company’s financial assets and financial liabilities in line with non
discount cash flow of the contracts as following： Currency unity:10kYuan
Within 1
Items 1-2 years 2-5 years Over 5 years Total
year
Financial Assets
118 / 141
Within 1
Items 1-2 years 2-5 years Over 5 years Total
year
Cash and cash in bank 37,344.57 37,344.57
Notes receivable 13,912.10 13,912.10
Accounts receivable 81,701.20 81,701.20
Financing receivable 6,173.73 6,173.73
Other Receivable 6,752.72 6,752.72
Contract asset 9,143.00 9,143.00
Noncurrent asset due
4,200.36 4,200.36
within 1 year
Long-term receivable 6,586.80 6,586.80
Other noncurrent
23,930.41 23,930.41
financial asset
Financial Liabilities
Short-term loan 28,297.16 28,297.16
Notes Payable 29,515.14 29,515.14
Accounts payable 76,726.72 76,726.72
Other payable 4,301.75 4,301.75
Employee’s payable 3,112.58 3,112.58
Tax payable 971.42 971.42
Noncurrent liability due
3,715.71 3,715.71
within 1 year
Long-term loan 16,000.00 16,000.00
Long-term payable 1,462.25 1,462.25
X. Disclosure of Fair Value
1. Amount and measurement level of the assets and liabilities measured at fair value at the year end
Fair value at the year end
Items First level Second level Third level
measurement of measurement of measurement of Total
fair value fair value fair value
Financial assets
Continuously
measured at FV — — — —
available for sale
I. Other noncurrent
financial asset 226,312,440.24 12,991,658.59 239,304,098.83
Measured at FV
through P&L 226,312,440.24 12,991,658.59 239,304,098.83
(1) Debt
instruments
investment
(2) Equity
instruments 226,312,440.24 12,991,658.59 239,304,098.83
investment
119 / 141
Fair value at the year end
Items First level Second level Third level
measurement of measurement of measurement of Total
fair value fair value fair value
(3) Derivative
financial asset
(4) Others
Total 226,312,440.24 12,991,658.59 239,304,098.83
2. Basis for Market price of first level measurement of fair value
Equity instrument portion of the other noncurrent financial asset is measured at the unadjusted
closing quoted price on stock market on December 31, 2020.
3. For continuous and discontinuous 2nd level of FV, valuation technique adopted and key parameter
quantitive and qualitive information.
None.
4. For continuous and discontinuous 3rd level of FV, valuation technique adopted and key parameter
quantitive and qualitive information.
The company has equity investment in Guotai Junan Investment Management Company, Lengwang
Container Temperature Control (Suzhou) Co. Ltd, Dalian Guolian Energy Development Co., Ltd and
Wuhan Steel Electric Company. Up to December 31st, 2020, its closing balance was
12,991,658.59Yuan. In accordance with “No 22 standard-financial instrument recognition and
measurement”, it was listed under other noncurrent financial asset. As the relative observable input
cannot be obtained where there is no market activity or few activities, the cost is applied to the
shares FV with respect to effect factors.
5. For continuous 3rd level of FV, adjusted information of opening and closing balance and
sensitivity analysis of unobservable parameter.
No.
6. Assets continuously measured at fair value have switched among different level during the year.
No.
7. Changes of valuation technique and reasons for changes
No.
8. Assets and liability are disclosed at FV rather than measured at FV
No.
XI. Related Parties Relationship and Transactions
(I) Related parties’ relationship
1. Parent company and ultimate controller
(1) Parent company and ultimate controller
Parent Registered Business Registered Shareholding Voting
company address nature capital percentage power
(%) percentage
(%)
Dalian
Bingshan
Dalian Manufacture 158,580,000.00 20.27 20.27
Group Co.,
Ltd.
Note: Dalian Bingshan Group Co., Ltd. is a Sino –foreign joint venture located No.106 Liaohe East
Road, DDZ, Dalian, China. The legal representative of Dalian Bingshan Group Co., Ltd. is Mr. Ji
Zhijian, and the registered capital is RMB158.58 million. The registered business operation period is
from 3rd July 1985 to 2nd July 2035. The business scope include research, development,
120 / 141
manufacture, sales, service and installment of refrigeration equipment, cooling and freezing
equipment, different size of air-conditioners, petrochemical equipment, electronic and electronic-
control products, home electronic appliance, environment protect equipment and etc. (unless the
licenses needed)
(2) Change of registered capital of controlling shareholder
Controlling shareholder Opening balance Increase Decrease Closing balance
Dalian Bingshan Group 158,580,000.00 158,580,000.00
Co., Ltd.
(3) Change of proportion of controlling shareholder’s shareholding and equity
Shareholding amount Ratio of shareholding（%）
Closing balance Opening balance Ratio Ratio at
Controlling
at year end beginning of
shareholder
year
Dalian Bingshan
170,916,934.00 170,916,934.00 20.27% 20.27%
Group Co., Ltd.
2. Subsidiaries
Referrer to the content in the Note “VIII. 1. (1) Organization structure of group company”.
3. Affiliated company and joint venture
The information of the affiliated company and joint venture please refers to the note “VIII. 2.(1) The
significant affiliated company and joint venture’. The company had transactions with related parties
during the current period or last period, including:
Names of the joint ventures or affiliated
Relationships with the Company
company
Panasonic Refrigeration (Dalian) Co., Ltd Affiliated company of the Company
Panasonic Cold-chain (Dalian) Co., Ltd Affiliated company of the Company
Panasonic Compressor (Dalian) Co., Ltd Affiliated company of the Company
Dalian Honjo Chemical Co., Ltd Affiliated company of the Company
Keinin-Grand Ocean Thermal Technology
Affiliated company of the Company
(Dalian) Co., Ltd
Beijing Huashang Bingshan Refrigeration and
Affiliated company of the Company
Air-conditioning Machinery Co., Ltd
Dalian Fuji Bingshan Vending Machine Co., Ltd Affiliated company of the Company
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. Affiliated company of the Company
Dalian Fuji Iceberg Vending Machine Sales Co.,
Affiliated company of the Company
Ltd
Jiangsu Jingxue Freezing Equipment Co., Ltd. Affiliated company of the Company
Dalian Jingxue Freezing Equipment Co., Ltd Subsidiary of affiliated company
Shanghai Jingxue Freezing Equipment Co., Ltd Subsidiary of affiliated company
Panasonic Cooling Machine system (Dalian) co.,
Affiliated company of the Company
Ltd
Dalian Bingshan Metal Technology Co.,Ltd Affiliated company of the Company
121 / 141
Names of the joint ventures or affiliated
Relationships with the Company
company
Wuhan Sikafu Power Control Equipment Co., Affiliated wholly owned subsidiary of the
Ltd Company
4. Other related parties
Name of related party Related party relationship
Dalian Bingshan Group Refrigeration Equipment Affiliated company of Dalian Bingshan
Co., Ltd Group
Affiliated company of Dalian Bingshan
Dalian Spindle Cooling Towers Co., Ltd
Group
Affiliated company of Dalian Bingshan
BAC (Dalian) Co., Ltd
Group
Linde Hydrogen Refill Station Equipment(Dalian) Affiliated company of Dalian Bingshan
Co.,Ltd Group
Dalian Pate Technology Co.,Ltd Subsidiary of Dalian Bingshan Group
Dalian Bingshan Group Management Consulting
Subsidiary of Dalian Bingshan Group
Co., Ltd
Alphavita Bio-scientific (Dalian) Co., Ltd. Subsidiary of Dalian Bingshan Group
Dalian Fuji Bingshan Intelligent Control System Affiliated company of Subsidiary of Dalian
Co., Ltd. Bingshan Group
Affiliated company of Subsidiary of Dalian
Dalian Kaierwen science Co.,Ltd
Bingshan Group
Affiliated company of Subsidiary of Dalian
Dalian Bingshan Huigu Development Co., Ltd.
Bingshan Group
Dalian Bingshan Group Huahuida Financial Affiliated company of Subsidiary of Dalian
Leasing Co., Ltd Bingshan Group
(II) Related Party transactions
1. Purchase of goods, offer and receive labour services etc inter-group transactions
(1) Purchase of goods/receive labour services
Related party Content Current year Last year
Panasonic cold machine system Purchases of
6,204,102.31 20,404,974.54
(Dalian) co., Ltd goods
Panasonic Refrigeration (Dalian) Co., Purchases of
5,734,790.46 62,129,989.80
Ltd. goods
Purchases of
BAC (Dalian) Co., Ltd 38,558,623.38 29,152,733.71
goods
Purchases of
Panasonic Cold-chain (Dalian) Co., Ltd 6,771,058.02 45,389,737.51
goods
Jiangsu Jingxue Energy Saving Purchases of
12,637,825.68 24,101,509.72
Technology Co., Ltd. goods
Dalian Jingxue Freezing Equipment Purchases of
31,132.74 146,041.53
Co., Ltd goods
Shanghai Jingxue Freezing Equipment Purchases of
183,328.06
Co., Ltd goods
Dalian Bingshan Group Refrigeration Purchases of
25,610,580.45 30,022,396.88
Equipment Co., Ltd goods
Dalian Bingshan Huigu Development Purchases of
606,531.23
Co., Ltd. goods
Purchases of
Dalian Pate Technology Co.,Ltd 4,424,140.00 7,566,203.85
goods
Dalian Spindle Cooling Towers Co., Purchases of
3,165,693.81 2,249,905.58
Ltd goods
Panasonic compressor (Dalian) Co., Purchases of
239,127.13 3,657,907.93
Ltd goods
122 / 141
Related party Content Current year Last year
Dalian Bingshan Metal Technology Purchases of
185,173.85 139,088.52
Co., Ltd goods
Dalian Fuji Bingshan Vending Machine Purchases of
367,523.32 14,488.80
Co., Ltd goods
Dalian Fuji Bingshan Intelligent Purchases of
590,517.27
Control System Co., Ltd. goods
Dalian Bingshan Group Hua Hui Da Purchases of
25,898,027.71
Financial Leasing Co, .Ltd goods
Purchases of
Dalian Bingshan Group 9,759.29
goods
Total 129,837,558.15 226,355,354.93
(2) Sales of goods/ labour services provision
Related party Content Current year Last year
Panasonic Cold-chain (Dalian) Co., Ltd Sales of goods 93,027,572.31 153,714,141.77
Panasonic Refrigeration (Dalian) Co., Ltd. Sales of goods 45,338,115.66 107,324,642.72
Dalian Fuji Bingshan Vending Machine
Sales of goods 18,376,724.10 25,196,481.50
Co., Ltd
Panasonic Cold Machine System (Dalian)
Sales of goods 30,951,802.17 27,450,532.31
co., Ltd
MHI Bingshan Refrigeration (Dalian) Co.,
Sales of goods 8,338,788.98 5,177,249.31
Ltd.
Beijing Huashang Bingshan Refrigeration
Sales of goods 617,094.02 -708,562.26
and Air-conditioning Machinery Co., Ltd.
5,171,634.65 13,681,505.10
Panasonic compressor (Dalian) Co., Ltd Sales of goods
Dalian Pate Technology Co.,Ltd Sales of goods 1,318,667.79 3,771,113.79
Keinin-Grand Ocean Thermal Technology
Sales of goods 1,048,376.71 630,550.64
(Dalian) Co., Ltd.
Dalian Fuji Iceberg Vending Machine
Sales of goods 94,850.24 639,114.37
Sales Co., Ltd
Dalian Jingxue Freezing Equipment Co.,
Sales of goods 1,133,622.82 142,855.01
Ltd
BAC (Dalian) Co., Ltd Sales of goods 37,735,772.48 33,320,065.32
Dalian Bingshan Group Refrigeration
Sales of goods 4,876,532.38 5,149,639.01
Equipment Co., Ltd
Dalian Bingshan Huigu Development
Sales of goods 9,909,504.28 267,864.23
Company
Dalian Bingshan Group Huahuida
Sales of goods 38,052,648.77 814,601.65
Financial Leasing Co.,Ltd
Dalian Spindle Cooling Towers Co., Ltd Sales of goods 4,561,140.10 384,956.00
Wuhan Sikafu Power Control Equipment
Sales of goods 817,593.80 433,748.89
Co., Ltd
Dalian Fuji Bingshan Intelligent Control
Sales of goods 205,929.20 37,053.20
System Co., Ltd
Alphavita Bio-scientific (Dalian) Co., Ltd. Sales of goods 1,865,032.81 8,254.27
Dalian Bingshan Group Sales of goods 139,331.33
Total 303,580,734.60 377,435,806.83
2. Assets Lease
(1) Assets rent out
Category of Current year Last year
Lessor Lessee
assets rent out Lease Income Lease Income
Bingshan Dalian Bingshan Office 132,110.09 132,110.09
123 / 141
Category of Current year Last year
Lessor Lessee
assets rent out Lease Income Lease Income
Refrigeration& Heat Group Co., Ltd.
Transfer Technologies
Co.,Ltd
Bingshan
MHI Bingshan
Refrigeration& Heat
Refrigeration Plant 3,809,523.80 2,976,190.47
Transfer Technologies
(Dalian) Co., Ltd.
Co.,Ltd
Bingshan Dalian Bingshan
Refrigeration& Heat Huigu
Land/property 8,190,552.35 7,446,778.47
Transfer Technologies Development
Co.,Ltd Company
Bingshan
Panasonic
Refrigeration& Heat Employee
Cold-chain 39,339.45 52,844.04
Transfer Technologies dormitory
(Dalian) Co., Ltd
Co.,Ltd
Bingshan
Panasonic
Refrigeration& Heat Employee
compressor 114,285.70 68,571.42
Transfer Technologies dormitory
(Dalian) Co., Ltd
Co.,Ltd
Bingshan
Panasonic
Refrigeration& Heat Employee
Refrigeration 63,412.88 64,480.41
Transfer Technologies dormitory
(Dalian) Co., Ltd.
Co.,Ltd
Bingshan
Refrigeration& Heat Dalian Honjo Employee
132,110.09
Transfer Technologies Chemical Co., Ltd dormitory
Co.,Ltd
Dalian Bingshan
Dalian Jingxue
Lingshe Quick
Energy Saving
Freezing Equipment Plant and office 1,005,111.44 1,002,859.55
Technology Co.,
Co., Ltd
Ltd.
Wuhan New World
Wuhan Sikafu
Refrigeration Industry
Power Control Plant 212,990.08
Co. Ltd
Equipment Co., Ltd
(2) Assets under lease
Category of Current year Last year
Lessor Lessee
assets rent in Lease fees Lease fees
Dalian Bingshan Dalian Xinminghua
Group Huahuida Electrical Technology
FA 3,621,571.20 3,270,174.66
Financial Leasing Co., Ltd
Co.
Dalian Bingshan Wuhan New World
Group Huahuida Refrigeration Industry
FA 14,690,379.43 10,938,110.82
Financial Leasing Co. Ltd
Co.
Dalian Bingshan Wuhan Lanning Energy
Group Huahuida Technology Co., Ltd FA 2,814,560.00 2,412,480.00
Financial Leasing
124 / 141
Category of Current year Last year
Lessor Lessee
assets rent in Lease fees Lease fees
Co.
3. Warranty provided by Related Parties
The national development fund planned to support the company’s intelligent and green equipment of
cold chain and service industry base project, and provide the special fund to the controlling
shareholder of the company, Bingshan Group. Please refer to the “ Note VI. 30 long term
borrowings”.
4. Funds borrow from /lent to related party
Name of the related Take Starting
Amount Ending date Explanation
party in/out date
Dalian Bingshan Project fund
Take in 160,000,000.00 2016.03.14 2026.03.13
Group Co., Ltd. investment
Total 160,000,000.00
The national development fund planned to support the company’s intelligent and green equipment of
cold chain and service industry base project, and provide the special fund to the controlling
shareholder of the company, Bingshan Group in 2016. After the above funds are in place, Bingshan
Group will allocate them to the company in full and without any additional charge. The above
special fund is 0.16 billionYuan in total, the loan interest is fixed interest rate at 1.2% annual rate and
paid interest 1,941,333.32Yuan for this year.
5. Other transactions among the related parties
Item transaction Current year Last year
Dalian Bingshan Group Co.,Ltd Sold equity of affiliated company 74,007,700.00
Total 74,007,700.00
In November 2020, Bingshan Refrigeration& Heat Transfer Technologies Co., Ltd sold 49%
shareholding in Dalian Bingshan Group Management and Consulting Co.,LTd to Dalian Bingshan
Group. This share transfer has been approved through 13th meeting of the 8th directors’ meeting and
announced for related party transaction.
6. Management Remuneration
Item Current year Last year
Total remuneration 3,792,100.00 3,609,700.00
(III) Balances with Related party
1.Accounts receivable due from related parties
Closing Balance
Item Related party Book Bad debt
Balance Provision
Accounts
BAC (Dalian) Co., Ltd 9,504,843.22 667,239.99
receivable
Accounts Beijing Huashang Bingshan Refrigeration and
7,240,855.23 3,675,419.18
receivable Air-conditioning Machinery Co., Ltd
Accounts
Alphavita Bio-scientific (Dalian) Co., Ltd. 796,179.45 55,891.80
receivable
Accounts Dalian Fuji Bingshan Vending Machine Co.,
6,782,271.29 476,115.44
receivable Ltd.
Accounts
Dalian Spindle Cooling Towers Co., Ltd 2,099,049.80 147,353.30
receivable
Accounts
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. 1,381,832.96 97,004.67
receivable
Accounts Panasonic Cold Machine system (Dalian) Co.,
5,009,806.43 351,688.41
receivable Ltd
Accounts
Panasonic Cold Chain (Dalian) Co., Ltd 31,200,329.39 2,190,263.12
receivable
125 / 141
Closing Balance
Item Related party Book Bad debt
Balance Provision
Accounts
Panasonic Compressor (Dalian) Co., Ltd 170,229.87 11,950.14
receivable
Accounts
Panasonic Refrigeration (Dalian) Co., Ltd 10,217,335.97 717,256.99
receivable
Accounts Wuhan Sikafu Power Control Equipment Co.,
36,484.00 2,561.18
receivable Ltd
Accounts Dalian Fuji Bingshan Intelligent Control
140,000.00 9,828.00
receivable System Co., Ltd.
Contract asset Dalian Bingshan Group Refrigeration
75,000.00 5,265.00
Equipment Co., Ltd.
Contract asset Panasonic Cold Machine system (Dalian) Co.,
72,500.00 5,089.50
Ltd
Prepayment Dalian Bingshan Group Refrigeration
222,875.00
Equipment Co., Ltd.
Prepayment Panasonic Cold Machine system (Dalian) Co.,
343,673.53
Ltd
Prepayment Panasonic Cold Chain (Dalian) Co., Ltd 3,938.00
Prepayment Dalian Kaierwen science Co., Ltd 1,445,000.00
Prepayment Dalian Bingshan Huigu Development Co., Ltd. 114,756.00
Prepayment Dalian Spindle Cooling Towers Co., Ltd 207,390.00
Jiangsu Jingxue Energy Saving Technology
Prepayment 6,397,458.41
Co., Ltd.
Receivable
BAC (Dalian) Co., Ltd 10,501,112.93
financing
Receivable Dalian Fuji Bingshan Vending Machine Co.,
494,341.48
financing Ltd.
Receivable Panasonic Cold Machine system (Dalian) Co.,
6,185,494.14
financing Ltd
Receivable
Panasonic Cold Chain (Dalian) Co., Ltd 16,320,000.00
financing
Receivable
Panasonic Compressor (Dalian) Co., Ltd 1,025,446.21
financing
Receivable
Panasonic Refrigeration (Dalian) Co., Ltd 5,049,112.09
financing
Notes
Panasonic Cold Chain (Dalian) Co., Ltd 6,400,000.00 449,280.00
receivable
Notes
Panasonic Refrigeration (Dalian) Co., Ltd 4,125,319.49 289,597.43
receivable
Other
Dalian Bingshan Group 36,263,700.00 2,371,645.98
receivable
(Continued)
Opening Balance
Item Related party Book Bad debt
Balance Provision
Accounts
BAC (Dalian) Co., Ltd 8,539,042.08 579,800.95
receivable
Accounts Beijing Huashang Bingshan Refrigeration and
6,717,761.21 1,638,415.37
receivable Air-conditioning Machinery Co., Ltd
Accounts Dalian Fuji Bingshan Vending Machine Co.,
2,683,672.86 182,221.39
receivable Ltd.
Accounts
Dalian Spindle Cooling Towers Co., Ltd 33,010.40 2,241.41
receivable
126 / 141
Opening Balance
Item Related party Book Bad debt
Balance Provision
Accounts
MHI Bingshan Refrigeration (Dalian) Co., Ltd. 1,437,917.14 97,634.57
receivable
Accounts Panasonic Cold Machine system (Dalian) Co.,
6,419,162.21 436,396.60
receivable Ltd
Accounts
Panasonic Cold Chain (Dalian) Co., Ltd 16,875,971.95 1,153,468.33
receivable
Accounts
Panasonic Compressor (Dalian) Co., Ltd 296,902.58 20,159.69
receivable
Accounts
Panasonic Refrigeration (Dalian) Co., Ltd 2,091,660.89 142,023.77
receivable
Accounts Wuhan Sikafu Power Control Equipment Co.,
9,739.50 661.31
receivable Ltd
Accounts Dalian Fuji Bingshan Intelligent Control
100,251.50 6,807.08
receivable System Co., Ltd.
Accounts Dalian Bingshan Group Huahuida Financial
1,935,465.61 296,900.42
receivable Leasing Co., Ltd..
Accounts
Dalian Bingshan Huigu Development Co., Ltd. 920,000.00 62,468.00
receivable
Contract asset Panasonic Refrigeration (Dalian) Co., Ltd 1,010,000.00 68,579.00
Contract asset Panasonic Cold Machine system (Dalian) Co.,
72,500.00 4,922.75
Ltd
Contract asset BAC (Dalian) Co., Ltd 25,636.80 3,932.69
Jiangsu Jingxue Energy Saving Technology
Prepayment 2,539,291.63
Co., Ltd.
Prepayment Panasonic Refrigeration (Dalian) Co., Ltd 164,600.00
Dalian Bingshan Group Refrigeration
Prepayment 468,800.00
Equipment Co., Ltd.
Panasonic Cold Machine system (Dalian) Co.,
Prepayment 341,601.00
Ltd
Prepayment Panasonic Cold Chain (Dalian) Co., Ltd 3,938.00
Prepayment Dalian Spindle Cooling Towers Co., Ltd 56,500.00
Prepayment Dalian Pate Technology Co., Ltd 2,800.00
Notes
BAC (Dalian) Co., Ltd 11,317,936.09
receivable
Notes Panasonic Cold Machine system (Dalian) Co.,
4,692,378.47
receivable Ltd
Notes
Panasonic Compressor (Dalian) Co., Ltd 1,859,495.23
receivable
Notes
Panasonic Cold Chain (Dalian) Co., Ltd 43,270,000.00 1,548,120.00
receivable
Notes Dalian Fuji Bingshan Vending Machine Co.,
12,607,409.17 856,043.08
receivable Ltd.
Notes
Panasonic Refrigeration (Dalian) Co., Ltd 18,494,998.52 450,703.89
receivable
Notes
MHI Bingshan Refrigeration (Dalian) Co., Ltd. 886,450.00 60,189.96
receivable
2. Accounts Payable due from Related Party
Item Related party Closing Balance Opening Balance
127 / 141
Item Related party Closing Balance Opening Balance
Accounts Payable BAC Dalian Co., Ltd 24,377,268.45 6,536,883.20
Dalian Bingshan Group
Accounts Payable 5,805,008.65 4,904,782.83
Refrigeration Equipment Co., Ltd.
Dalian Bingshan Pate Technology
Accounts Payable 1,988,696.08 2,033,644.49
Co., Ltd
Dalian Fuji Bingshan Vending
Accounts Payable 60,519.99
Machine Co., Ltd.
Dalian Spindle Cooling Towers
Accounts Payable 695,784.00 2,235,874.00
Co., Ltd
Jiangsu Jingxue Energy Saving
Accounts Payable 4,542,624.08 7,827,836.00
Technology Co., Ltd.
Dalian Fuji Bingshan Intelligent
Accounts Payable 132,284.48
Control System Co., Ltd.
Dalian Fuji Bingshan Vending
Accounts Payable 414,000.00 414,000.00
Machine Sales Co., Ltd.
Panasonic Cold Machine System
Accounts Payable 14,096,385.66 22,882,950.32
(Dalian) Co., Ltd
Panasonic Cold Chain (Dalian) Co.,
Accounts Payable 7,109,782.64
Ltd
Panasonic Compressor (Dalian)
Accounts Payable 1,805,998.72 1,696,000.00
Co., Ltd
Panasonic Refrigeration (Dalian)
Accounts Payable 1,207,795.95 19,565,101.85
Co., Ltd.
Dalian Bingshan Metal Technology
Accounts Payable 66,651.05
Co., Ltd
Other payable Dalian Bingshan Group 800,000.00 5,900,000.00
Dalian Bingshan Huigu
Other payable 500,000.00
Development Co., Ltd
MHI Bingshan Refrigeration
Other payable 170,000.00 170,000.00
(Dalian) Co., Ltd.
Jiangsu Jingxue Energy Saving
Other payable 70,000.00
Technology Co., Ltd.
Dalian Spindle Cooling Towers
Contract liability 1,769,911.50 1,654,558.79
Co., Ltd
Contract liability Panasonic Cold Machine System
10,752,300.88
(Dalian) Co., Ltd
Contract liability Dalian Bingshan Huigu
619,469.03
Development Co., Ltd
Contract liability Panasonic Cold Chain (Dalian) Co.,
87,977.15 501,998.42
Ltd
Contract liability Wuhan Sikafu Power Control
169,942.30
Equipment Co., Ltd
Notes Payable BAC (Dalian) Co., Ltd 869,502.00 21,758,609.00
Dalian Bingshan Group
Notes Payable 8,124,711.01 10,722,797.72
Refrigeration Equipment Co., Ltd.
Dalian Bingshan Metal Technology
Notes Payable 77,548.03
Co., Ltd
Dalian Bingshan Pate Technology
Notes Payable 1,600,000.00 1,200,000.00
Co., Ltd
Jiangsu Jingxue Energy Saving
Notes Payable 627,084.00
Technology Co., Ltd.
128 / 141
Item Related party Closing Balance Opening Balance
Panasonic Cold Chain (Dalian) Co.,
Notes Payable 1,657,321.00 64,984.00
Ltd
Dalian Spindle Cooling Towers
Notes Payable 150,000.00 969,602.80
Co., Ltd
Panasonic Cold Machine System
Notes Payable 112,010.00 92,728.65
(Dalian) Co., Ltd
Dalian Bingshan Group Huahuida
Long term payable 26,779,556.16 24,968,431.60
Financial Leasing Co., Ltd..
(IV) Related Party Commitment
No.
XII. Share-Based Payment
None
XIII. Contingency
As at 31 December 2020, the Group does not have any other contingencies for disclosure.
XIV. Commitment
As at 31 December 2020, the Group does not have any other significant commitments.
XV. Events after the Balance Sheet Date
1. Significant events had not adjusted
None.
2. Information about profit distribution
The 16th meeting of the 8th generation of board was held on 22nd April 2021 and approved the profit
distribution policy for the year of 2020, extracting 20% of the free surplus reserves and based on
843,212,507.00 numbers of share in total, paying out cash dividend of 0.1Yuan for every 10 shares
(before tax) and cash dividend of B shares are paid in Hong Kong dollars.
3. Sales Return
There is no significant sales return after the balance sheet date.
4. Except the subsequent event disclosed above, the Company has no other
significant subsequent event.
XVI. Other Significant Events
1. Error correction and effect in previous period
No.
2. Debt Restructuring
Book Value of debt Gain on debt Capital
Restructuring
restructuring increase
Debts settled by asset
Debt transfer into equity
instrument
Amendment to other debt
10,507,822.08 681,549.89
condition
Hybrid restructuring
Note: In March, 2020, Wuhan New Refrigeration amended the debt terms with 6 suppliers, including
Wuhan Zhongwei Explosion Control System Co., Ltd., through mediation by the court. The total
amount of debt exempted from the 6 suppliers was 681,549.89Yuan, and the total amount of debt
repaid was completed in 2020.
3. Asset exchange
(1) The exchange of non-monetary assets
No.
(2) The exchange of other assets
No.
4. Annuity Plan
No.
5. Operation termination
129 / 141
No.
6. Segment Information
The management of the Company divided the Company into 3 segments based on the geographic
area: Northeast China, Central China, and East China. The Northeast is the Company’s general
headquarters and the subsidiaries registered in Dalian. The Central is the subsidiary of the Company,
Wuxin Refrigeration and its subsidiary, WuLeng Engineering, Wuhan Lanning, and Chengdu
Bingshan. The East is the subsidiaries of the Company, and they are Ningbo Bingshan
Air-conditioning Refrigeration Engineering Co., Ltd.
(1) The basis and accounting policies of reporting segments
The internal organization structure, management requirements and internal report scheme are the
determination basis for the Company to set the operating segments. The segments are those satisfied
the following requirements.
1).The segment can generates revenue and incur expenses.
2).The management personnel can regularly evaluate the operation results of segments and
allocate resource, assess its performance.
3).The financial situation, operation results, cash flow and other accounting information of
segments can be acquired.
The Company confirms the report segments based on the operating segments. The transfer price
among segments is set base on the market price. The assets and related expenses in common use are
allocated to different segments based on their proportion of revenue.
(2)The financial information of reporting segments
Amount unit ：Ten thousands Yuan
Current year
Items Northeast Central
East China Offset Total
China China
1 Operating income 213,433.46 17,480.86 1,481.31 -59,668.84 172,726.79
2 Cost 181,852.52 18,362.22 1,240.24 -58,202.57 143,252.41
Impairment loss on assets 1,277.64 37.03 5.15 27.82 1,347.64
Impairment loss on credit 3,146.67 169.27 -20.43 176.25 3,471.76
Depreciation and
6,980.73 1,157.92 0.67 8,139.32
amortization
3 Investment income from
associates and joint 9,188.38 9,188.38
venture
4 Operating profits(loss) 5,021.45 -1,934.27 1.98 -1,662.66 1,426.50
5 Income tax -1,068.49 -105.39 3.65 311.75 -858.48
6 Net profit(loss) 6,089.93 -1,828.87 -1.67 -1,974.41 2,284.98
7 Total assets 623,034.24 53,824.76 1,364.54 -110,066.71 568,156.83
8 Total liabilities 225,537.82 36,284.85 982.58 -39,569.05 223,236.20
7. Other important transactions and matters affect the investor's decision
The company hasn’t had other important transactions and matters affect the investor's decision in
this period.
XVII. Notes to the Main Items of the Financial Statements of Parent Company
1. Accounts receivable
(1) Accounts receivable category
Closing Balance
Item Booking balance Provision
Booking value
Amount % Amount %
Accounts receivable
with significant
individual amount
130 / 141
Closing Balance
Item Booking balance Provision
Booking value
Amount % Amount %
and separate bad
debt provision
Accounts receivable
with bad debt
provision based on 474,709,875.38 100.00 66,083,949.47 13.92 408,625,925.91
the characters of
credit risk portfolio
(1) Accounting
age as 250,449,415.13 52.76 66,083,949.47 26.39 184,365,465.66
characters
(2) Related party
within
224,260,460.25 47.24 224,260,460.25
consolidation
scope
Total 474,709,875.38 100.00 66,083,949.47 13.92 408,625,925.91
(Continued)
Opening Balance
Item Booking balance Provision Booking
Amount % Amount % balance
Accounts receivable
with significant
individual amount 50,985,562.10 8.55 12,133,091.84 23.80 38,852,470.26
and separate bad debt
provision
Accounts receivable
with bad debt
provision based on 545,642,374.31 91.45 75,743,792.60 13.88 469,898,581.71
the characters of
credit risk portfolio
(1) Accounting age
247,047,825.87 41.40 75,743,792.60 30.66 171,304,033.27
as characters
(2) Related party
within
298,594,548.44 50.05 298,594,548.44
consolidation
scope
Total 596,627,936.41 100.00 87,876,884.44 14.73 508,751,051.97
1) The bad debt provisions of accounts receivable in the portfolio is accrued under accounting
aging analysis method:
Closing Balance
Aging Drawing
Provision for bad
Accounts receivable Proportion
debts
(%)
Within 1 year 136,825,046.31 9,605,118.25 7.02
1-2 years 27,726,196.86 4,641,365.35 16.74
2-3 years 31,087,726.13 9,584,345.97 30.83
3-4 years 16,227,993.03 8,005,268.96 49.33
4-5 years 15,564,100.02 11,229,498.16 72.15
Over 5 years 23,018,352.78 23,018,352.78 100.00
Total 250,449,415.13 66,083,949.47 -
(2) Bad debt provision
131 / 141
Aging Closing Balance
Within 1 year 354,116,521.68
1-2 years 34,695,181.75
2-3 years 31,087,726.12
3-4 years 16,227,993.03
4-5 years 15,564,100.02
Over 5 years 23,018,352.78
Total 474,709,875.38
(3) Bad debt provision
Change during the year
Opening Closing
Category Accrued Collected/
balance Written-off Balance
reversed
Bad debt
87,876,884.44 4,127,791.84 17,665,143.13 66,083,949.47
provision
Total 87,876,884.44 4,127,791.84 17,665,143.13 66,083,949.47
(4) Accounts receivable written off in current period.
Item Written off amount
Receivable actually written off 7,563,512.61
(5) The top five significant accounts receivable categorized by debtors
Closing
% of the
Company Closing Balance Aging Balance of
total AR
Provision
Xinyi Yuanda Construction 2-3 years
and Installation Engineering 32,748,744.00 3-4years 6.90 17,525,571.61
Co., Ltd. 4-5years
Qingcheng Zhongyi Energy
26,600,000.00 Within 1 year, 5.60 1,867,320.00
Co., Ltd
Within 1 year
Ningxia Wangwa Coal Co.,
20,631,495.12 1-2years 4.35 4,901,311.52
Ltd.
2-3years
Beidahuang Taihua Organic
9,615,000.00 Within 1 year, 2.03 674,973.00
Food Co. Ltd
Qinghai Yellow River
Upstream Hydropower
7,145,862.06 Within 1 year, 1.51 501,639.52
Development Co., Ltd. New
Energy Branch
Total 96,741,101.18 20.39 25,470,815.65
2. Other Receivables
Item Closing Balance Opening Balance
Interest receivable 46,879.68 583,833.33
Other receivable 41,136,517.46 5,398,160.49
Total 41,183,397.14 5,981,993.82
2.1 Interest receivable
(1) Interest receivable category
Item Closing Balance Opening Balance
Interest on term deposits 46,879.68 583,833.33
Total 46,879.68 583,833.33
2.2 Other receivable
132 / 141
(1) The category of other receivables
Items Closing Balance Opening Balance
Share transfer 36,263,700.00
Deposits 3,640,939.00 2,774,045.87
Petty cash 557,035.76 117,661.57
Receivables and payables 5,697,595.21 3,848,019.79
Others 68,554.00
Total 46,159,269.97 6,808,281.23
(2) The bad debt provision of other receivable
1st stage 2nd stage 3rd stage
bad debt Expected Expected credit Expected credit loss
credit loss loss within the within the whole Total
provision
within 12 whole period(no period(impairment
months impairment) incurred)
Opening
1,410,120.74 1,410,120.74
balance
Opening
balance
— — —
during the
year
--transfer to
the 2nd stage
--transfer to
the 3rd stage
--reverse to
the 2nd stage
----reverse to
the 1st stage
Accrued 3,612,631.77 3,612,631.77
Reverse
Cancelation
Written off
Other
movement
Closing
5,022,752.51 5,022,752.51
balance
(3) Other receivable listed by account aging
Aging Closing Balance
Within 1 year 41,176,821.26
1-2 years 1,068,247.71
2-3 years 300,000.00
3-4 years 2,415,636.00
4-5 years 1,100,000.00
Over 5 years 98,565.00
Total 46,159,269.97
(4) Bad debt provision.
133 / 141
Opening Change during the year Closing
.Category
balance Accrued Collected/reversed Written-off Balance
Bad debt
1,410,120.74 3,612,631.77 5,022,752.51
provision
Total 1,410,120.74 3,612,631.77 5,022,752.51
(5) Other receivables from the top 5 debtors
Closing
Closing % of the
Name Category Aging Balance of
Balance total OR
Provision
Dalian Bingshan
Share transfer 36,263,700.00 Within 1 year 78.56 2,371,645.98
Group
Dalian Lihua Coating Outstanding
1,650,000.00 3-4 years 3.57 833,745.00
Equipment debtor
Dalian Delta HK Security
1,100,000.00 4-5 years, 2.38 780,010.00
China Gas Co., Ltd. deposit
Dalian Changde Outstanding
765,636.00 3-4 years, 1.66 386,875.87
Welding Co., Ltd debtor
Huarun Shouzheng Security
740,000.00 Within 1 year 1.60 48,396.00
Tendering Co., Ltd deposit
Total 40,519,336.00 87.77 4,420,672.85
134 / 141
3. Long-term equity investments
(1) Category of long-term equity investments
Closing Balance Opening Balance
Item
Closing Balance Provision Book Value Opening Balance Provision Book Value
Investment of subsidiaries 687,496,652.08 687,496,652.08 587,496,652.08 587,496,652.08
Investment of affiliates and
JV 1,592,881,328.96 1,592,881,328.96 1,656,914,731.80 1,656,914,731.80
Total 2,280,377,981.04 2,280,377,981.04 2,244,411,383.88 2,244,411,383.88
(2) Investments of subsidiaries
Provision for Provision for
Opening
Subsidiaries names Increase Decrease Closing Balance impairment of the impairment
Balance
current period at year end
Dalian Bingshan Group Construction Co.,
93,749,675.77 100,000,000.00 193,749,675.77
Ltd
Dalian Bingshan Group Sales Co., Ltd 20,722,428.15 20,722,428.15
Dalian Bingshan Air-Conditioning
36,506,570.00 36,506,570.00
Equipment Co., Ltd
Dalian Bingshan Jiade Automation Co., Ltd 6,872,117.80 6,872,117.80
Dalian Bingshan Lingshe Quick Freezing
59,356,051.19 59,356,051.19
Equipment Co., Ltd
Dalian Niweisi LengNuan Technology Co.,
48,287,589.78 48,287,589.78
Ltd
Wuhan New World Refrigeration Industrial
184,674,910.81 184,674,910.81
Co., Ltd
Bingshan Technical Service （ Dalian ）
22,024,000.00 22,024,000.00
Co.,Ltd.
Dalian Xinminghua Electronics Co., Ltd. 43,766,243.72 43,766,243.72
Dalian Bingshan International Trading Co.,
71,537,064.86 71,537,064.86
Ltd
Total 587,496,652.08 100,000,000.00 687,496,652.08
135 / 141
(3) Joint ventures& affiliated companies
Increase/Decrease
Provision
Gains and Adjustme Provision
for
losses nt of Chang for
Beginning Cash bonus Ending impairme
Investee recognize other es of impairme
balance Increased Decreased or profits Others balance nt
d under comprehe other nt of the
announced at year
the equity nsive equity current
end
method income period
1. Affiliated companys
Panasonic Refrigeration 177,390,883.01 1,958,795.95 6,800,000.00 172,549,678.96
(Dalian) Co., Ltd.
Panasonic Cold-chain 267,179,066.77 7,354,346.53 274,533,413.30
(Dalian) Co., Ltd
Panasonic Compressor 471,693,615.32 30,151,282.66 36,026,000.00 465,818,897.98
(Dalian) Co., Ltd
Dalian Honjo Chemical 8,535,439.50 561,233.80 350,476.27 8,746,197.03
Co., Ltd
Keinin-Grand Ocean
Thermal Technology 61,090,955.30 3,444,000.08 8,600,000.00 55,934,955.38
(Dalian) Co., Ltd
Beijing Huashang
Bingshan Refrigeration 1,537,672.85 584,278.85 2,121,951.69
and Air-conditioning
Machinery Co., Ltd
Dalian Fuji Bingshan 193,109,792.44 -8,655,654.23 184,454,138.22
Vending Machine Co., Ltd
MHI Bingshan
Refrigeration (Dalian) Co., 13,892,866.25 998,253.42 14,891,119.67
Ltd.
Dalian Fuji Iceberg
Vending Machine Sales 12,614,480.80 -12,570,934.45 43,546.35
Co., Ltd
Jiangsu Jingxue Freezing 185,385,615.80 17,823,213.17 203,208,828.97
Equipment Co., Ltd.
136 / 141
Increase/Decrease
Provision
Gains and Adjustme Provision
for
losses nt of Chang for
Beginning Cash bonus Ending impairme
Investee recognize other es of impairme
balance Increased Decreased or profits Others balance nt
d under comprehe other nt of the
announced at year
the equity nsive equity current
end
method income period
Panasonic Cold Machine 33,975,371.41 5,973,075.90 2,528,392.05 37,420,055.26
System (Dalian) Co., Ltd
Bingshan Metal Technical
Service （ Dalian ） Co., 172,730,683.20 28,938,783.80 28,510,920.84 173,158,546.15
Ltd.
Dalian Bingshan Group
Management and 57,778,289.15 58,800,000.00 1,021,710.84
Consulting Company
Total 1,656,914,731.80 58,800,000.00 77,582,386.32 82,815,789.16 1,592,881,328.96
137 / 141
4. Operating revenue and cost
Item Current year Last year
Revenue Cost Revenue Cost
Revenue from main
710,173,991.25 589,797,068.56 639,185,625.79 533,579,945.34
operation
Revenue from other
40,847,679.19 26,502,030.35 38,042,049.11 27,732,441.09
operation
Total 751,021,670.44 616,299,098.91 677,227,674.90 561,312,386.43
5. Investment income
Items Current year Last year
Long-term equity investment gain under equity method 79,930,496.36 140,544,148.87
Gain from disposing long-term equity investment 12,859,589.96
Gain from holding of available for sale financial assets
Gain from disposal of financial assets available for sale
Gain from holding of tradable financial assets
Gain from disposing of tradable financial assets
Long-term equity investment gain under cost method 10,200,459.43 6,025,000.00
Gain from holding of other noncurrent financial assets 5,346,903.12 5,676,474.48
Gain from disposal of other noncurrent financial assets 6,784,485.22 22,482,217.16
Total 115,121,934.09 174,727,840.51
XVIII. Approval of Financial Statements
The parent and consolidated financial statements of the Company were approved by the Board of
Directors of the Group on April 22, 2021.
138
Supplementary Information to the Financial Statements
1. Non-operating profit or loss
Items Current year Notes
Gain or loss from disposal of non-current assets -169,550.05
Override, no formal approval or accidental tax refund, deduction or
exemption
Government grants recorded into profit or loss during current period 17,952,461.57
Expenses for using funds from non-financial institution recognized in
current profit/loss
Gains from acquisition of subsidiary or associates when initial cost is
less than the fair value of identifiable net asset of invested company
Profits/loss from non-monetary assets exchange
Profits/loss from investments or management of assets entrusted by
others
Assets impairment provision accrued due to force majeure, e.g.:
suffering natural disasters
Profit or loss from debts restructuring
Expenses of enterprise restructuring
Gain/loss on excessive part from the transaction where the trading price
is obviously unfair.
Net gain/loss of subsidiary from combination under same control
between the beginning of year and consolidation date.
Gains/ loss from contingencies arising from the normal business of the
Company
Gain/loss from change of fair value by holding the tradable financial
asset and liabilities, and or disposing of the tradable financial asset and
4,362,148.57
liabilities, available for sale financial assets, other than effective
hedging in relation to the company’s normal business
Reversal of impairment provision of accounts receivable separately
tested for impairment
The profits/loss from external entrusted fund
The profits/gains from changes of fair value for investment property
subsequently measured at fair value model
Effects of gain/loss from one-off adjustments of gain/loss based on laws
and regulations of taxation and accounting.
Custodian fees obtained from entrusted operations
Non-operating revenue and expense besides the above items -4,643,229.90
Other profit or loss
Subtotal 17,501,830.19
Effect on income tax 1,995,261.63
Attributable to minority shareholders’ equity (after tax) 293,787.16
Total 15,212,781.40
2. Return on equity and earnings per share
In accordance with the provisions of the China Securities Regulatory Commission, “Corporate
Information Disclosure and Compilation Rules for Public Offering of Securities No. 9 – Calculation
and Disclosure of Return on Net Assets and Earnings Per Share (2010 Revision)”, the Company’s
2020 annual weighted average net Return on assets, basic earnings per share and diluted earnings per
share are as follows:
139 / 141
Weighted Earnings per share
average (EPS)
Profit of report period
return on net Basic Diluted
assets (%) EPS EPS
Net profit attributable to shareholders of parent company 0.63 0.03 0.03
Net profit after deducting non-recurring gains and losses
0.18 0.01 0.01
attributable to shareholders of parent company
140 / 141
Section 13 Reference Documents
1. The accounting statements bearing the signatures and seals of the legal representative, the
financial majordomo and the accountants in charge.
2. The original copy of the auditor's report bearing the seal of the certified public accountants and
the signatures and seals of the certified accountants.
3. The original copies of all the Company's documents and the original copies of the bulletins
published on the newspapers designated by the China Securities Regulatory Commission in the
report period.
4. Time for reference: from Monday to Friday 8:00 - 11:30 (am) 1:00 - 4:30 (pm)
Liaison persons: Mr. Song Wenbao，Mrs Du Yu
Tel: 0086-411-87968130
Fax: 0086-411-87968125
Bingshan Refrigeration & Heat TransferTechnologies Co., Ltd.
April 24, 2021
141 / 141
